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The Kenya Revenue Authority (KRA) missed its revenue target in the first quarter of the 2025/2026 financial year. This raises fears that the authority may again fall short by June. The shortfall comes as annual tax targets were revised downward.
According to the National Treasury, KRA collected KSh 909.77 billion between July and November 2025. This is only a third of the annual target of KSh 2.63 trillion. Treasury Cabinet Secretary John Mbadi warned that the government may need a supplementary budget in February 2026. “Since we do not want to borrow more, we will have to cut the budget in accordance with revenue collection if revenue does not perform,” Mbadi said.
KRA now has seven months to collect KSh 1.72 trillion. Analysts say this will be a steep challenge. KRA usually collects most of its revenue in the final quarter, especially between May and June. The expected monthly average between December 2025 and June 2026 is KSh 245.3 billion. This is higher than the KSh 181.9 billion monthly average in the first five months.
The authority last exceeded its targets in 2021/2022, collecting KSh 2.03 trillion against a target of KSh 1.88 trillion. Since then, KRA has struggled, forcing downward revisions of targets. In 2024/2025, the annual target was cut from KSh 2.9 trillion to KSh 2.55 trillion. Last fiscal year, KRA collected KSh 2.571 trillion, up from KSh 2.407 trillion in 2023/2024.
Domestic revenues for the period under review were KSh 1.688 trillion. Customs duties added KSh 879.329 billion. With the shortfall already evident, the authority is under pressure to accelerate collections. Failure to do so could mean another year of missed targets.
KRA now faces the dual challenge of boosting compliance and ensuring revenue growth matches government spending. The coming months will be critical. How the authority performs will determine if Kenya can avoid budget cuts or extra borrowing.
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