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Updated 30 October 2026
The National Treasury has lowered its revenue targets for 2026/27. The Kenya Revenue Authority (KRA) collected KSh488.9 billion in July and August 2026 against a target of KSh516.9 billion, which left a gap of KSh28.1 billion. The figures are in the Draft 2027 Budget Policy Statement, as reported by The Star on 29 October.
New Treasury revenue targets at a glance
| Item | Earlier | Revised |
|---|---|---|
| 2026/27 ordinary revenue | KSh3.39 trillion | KSh3.25 trillion |
| 2026/27 total revenue target | – | KSh3.631 trillion |
| 2027/28 total revenue | KSh4.044 trillion | KSh4.004 trillion |
Treasury blames weak ordinary tax collections and external shocks for the cut. Those shocks include the Middle East conflict, which has pushed fuel prices to record highs.
Another year of missed targets
The cut follows a miss in 2025/26. The government collected about KSh3.2 trillion in the year to June 2026, KSh122.9 billion short of its first target of KSh3.32 trillion. The early months of 2026/27 have also been weak. KRA told MPs that domestic VAT for July to September came in at KSh98.2 billion, KSh2.6 billion below target. PAYE reached KSh154.9 billion, KSh7.3 billion below target (Tuko).
Why it matters
When revenue falls short, the government usually has to borrow more, cut spending or pay suppliers late. It also points to tougher tax enforcement. KRA has told MPs it plans to use M-Pesa till data to find businesses that under-declare their income. For background, see how KRA missed its 2025/26 target and Treasury’s KSh5.4trn 2027/28 budget plan.
The wider economic picture
The revenue cut comes as other indicators stay steady. Central Bank of Kenya data published on 29 October 2026 shows the Central Bank Rate at 8.75%, the 91-day Treasury bill at 8.750% and inflation at 6.8% in September 2026. The average commercial bank lending rate was 14.4% in September. The shilling is stable, with an indicative rate of KSh129.96 to the US dollar on 29 October (CBK).
Lower collections leave Treasury with less room to manage the budget. That matters more because fuel prices are at record highs: petrol is KSh226.96 a litre in Nairobi and diesel is KSh227.76 under EPRA’s cap for 15 October to 14 November. Households and businesses should watch the final Budget Policy Statement for new tax measures and changes to spending plans.
FAQ
How much did KRA miss by in July and August 2026?
KRA missed its target by KSh28.1 billion. It collected KSh488.9 billion against KSh516.9 billion.
What is the new 2026/27 ordinary revenue target?
The new target is KSh3.25 trillion, down from KSh3.39 trillion.
Where do these figures come from?
They come from the Draft 2027 Budget Policy Statement published by the National Treasury.
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