Value Added Tax from locally produced goods and services has shown a steady upward trajectory over the four financial years, reflecting both economic activity and tax administration efforts.
Collections rose from Sh244.93 billion in 2021-22 to Sh272.73 billion in 2022-23, pointing to a recovery in domestic demand after earlier disruptions.
The upward momentum strengthened in 2023-24, with local VAT increasing to Sh313.37 billion, supported by improved compliance, digital tax systems and a broader tax base.
In 2024-25, collections climbed further to Sh327.66 billion, underscoring the growing contribution of domestic production and services to government revenue.
The trend highlights the importance of local VAT as a stable revenue stream for the Exchequer, less exposed to external shocks than trade taxes.
As households and businesses adjust to changing prices and tax rates, local VAT continues to play a central role in funding public services and development spending.
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