KRA staff to get 3% incentive on revenue collected above quarterly targets

President William Ruto has signed into law amendments to the Kenya Revenue Authority (KRA) Act that set a minimum funding provision for the tax agency, introduce incentives tied to revenue collected above quarterly targets and add the Kenya Ports Authority (KPA) managing director to KRA’s board.

The Kenya Revenue Authority (Amendment) Act, 2026, was signed on Friday, October 16, at State Lodge in Eldoret, alongside other Bills.

Under the amended law, KRA’s funds will include an amount equivalent to not less than 2% of the revenue estimated to be collected by the authority in each financial year, as provided for in the financial estimates.

Also, the law introduces a performance-based incentive for KRA staff. The authority’s employees will be eligible for an amount equivalent to 3% of revenue collected in any quarter above the amount estimated for that quarter.

In addition, the provision links the incentive to collections exceeding the set target. It does not state that the 3% incentive applies to all revenue collected during a quarter.

The amendments also change the composition of KRA’s board by making the managing director of the Kenya Ports Authority a member.

The funding provision amends the financial arrangements governing the authority by setting a minimum amount linked to the revenue it is expected to collect in a financial year.

The National Assembly’s brief on the Bill says the changes are intended to guarantee proper funding for KRA and improve its ability to perform its functions.

However, the provision alone does not establish how the additional funding will affect the authority’s operational spending, nor does it specify the amount KRA will receive in a particular financial year.

The staff incentive introduces another financial mechanism tied to the authority’s performance against revenue targets.

Under the provision, the 3% calculation applies to the excess collected in a quarter rather than the entire amount collected.

The arrangement makes the amount available for the incentive dependent on whether quarterly collections exceed the relevant estimate.

The law also adds the managing director of the Kenya Ports Authority to KRA’s board.

The parliamentary brief describes the change as an efficiency measure, citing the interdependent nature of the two institutions’ operations.

KRA is responsible for collecting revenue, while KPA operates Kenya’s principal port facilities and other port services. The inclusion of its managing director gives the ports authority a formal place on KRA’s board under the amended law.

The Bill also provides for substantive membership of all KRA board members, with the parliamentary brief stating that there will be no ex officio members.

The amendments also revise the First Schedule of the KRA Act, which lists written laws relating to revenue.

The changes remove references to laws that have already been repealed and replace them with relevant legislation. One example cited in the parliamentary brief is the replacement of the Government Land Act with the Land Act.

The Retirement Benefits Act, Tobacco Control Act and Tea Act are also included among the written laws relating to revenue.

Sponsored by National Assembly Majority Leader Kimani Ichung’wah, the Bill was published on May 19, 2026, and received its First Reading on May 23.

It proceeded to the Second Reading on June 17 before being considered by the Committee of the whole House and passed with amendments on October 7.