Revenue shrinks by Sh30b in first quarter as corona hits key sectors

Thursday, October 22nd, 2020 00:00 |
KRA headquarters. Photo/File

Lewis Njoka @LewisNjoka

Revenue for the first quarter of 2020/21 reduced by Sh30 billion due to Covid-19 shocks, shedding the value of tax receipts, a new report shows.

In a budget topical note by Genghis Capital for the period, the asset management firm says ordinary revenue reduced by Sh29.7 billion (14.7 per cent) to stand at Sh342.6 billion down from Sh372.3 billion, same time last financial year.

“Ordinary revenue in the first quarter (July – September) period of the fiscal year hit Sh342.6 billion, comprising Sh317.7 billion and non-tax receipts at Sh24.9 billion,” it said in the fiscal performance report.

Compared to the last quarter of 2019/20 (April-June 2020), the tax receipts declined by 4.7 per cent, a reflection of the second round impact of the Covid-19 pandemic on the economy.

The first quarter performance follows a familiar trend where in the period between 2017/18 and 2019/20,  the country consistently missed the targets.

Budget review

The Genghis analysis relied on the net revenue and expenditure published in the Kenya Gazette last week and the final 2020 Budget Review Outlook Paper which was published by the National Treasury. 

Head of research at Genghis Capital, Churchill Ogutu, said he did not expect good performance on the Appropriations in Aid (AIA) which was not included in the Kenya Gazette publication.

“We still do not expect robust AiA performance due to the dampened effect of private consumption due to the pandemic (financial year 2019/20 miss of Sh89.2 billion, 35.8 per cent off target),” said Ogutu.

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