President William Ruto has signed a new law that will see Kenya Revenue Authority (KRA) staff benefit from increased financial rewards when the tax collector exceeds its revenue targets.
The Kenya Revenue Authority (Amendment) Act, 2026, provides that KRA will receive 3 per cent of the revenue collected above its target in each quarter of the financial year.
This means that when KRA collects more tax revenue than the government planned, the authority will receive additional money under the incentive arrangement.
The assent brief states that the measure is intended to improve KRA's performance and efficiency in collecting revenue.
President William Ruto assenting to the Tax Laws (Amendment) Bill and the Kenya Revenue Authority (Amendment) Bill 2026 at Eldoret State Lodge, Uasin-Gishu County, October 16, 2026.
PCS
The additional funds could support bonuses for employees if the money is allocated for staff rewards. However, the law does not state that every KRA employee will automatically receive a bonus or specify how much individual workers could earn.
At the same time, the law also guarantees KRA annual funding of at least 2 per cent of the revenue the authority expects to collect, giving it a minimum allocation to support its operations.
“The Bill now provides that the funds of the Authority shall include an amount not less than two per cent (2%) of the revenue estimated in the financial estimates for each financial year to be collected by the Authority,” the brief reads in part.
“Similarly, the Bill provides an incentive measure that three per cent (3%) of the revenue actually collected in any quarter of the financial year in excess of the amount estimated to be collected,” the new law signed on October 16 at Eldoret State Lodge adds.
The government expects better revenue collection to help finance public services without necessarily introducing new taxes to raise additional money.
KRA collects taxes on behalf of the government, including income tax, Value Added Tax (VAT), excise duty and customs duties on imported goods.
The authority has faced pressure to meet ambitious revenue targets as the government seeks to raise more money locally to finance its budget and reduce reliance on borrowing.
Meanwhile, the new law also changes the composition of the KRA Board by removing ex officio membership provisions and including the Managing Director of the Kenya Ports Authority (KPA).
The inclusion of the KPA chief is intended to improve coordination between the two institutions, whose work is closely linked through the collection of taxes on imported goods.
Kenya Revenue Authority offices
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KRA