A broader tax base pushed Kenya's tax revenues for the second quarter of fiscal 2011/12 (July-June) year rose 9 percent to 177.2 billion shillings ($2 billion) year-on-year, but high inflation will hurt third quarter earnings, Reuters quoted the revenue body as saying on Tuesday. Despite the higher earnings, east Africa's biggest economy revenue collection hardly meets the country's expenditure budget to fund cash guzzling infrastructure projects, contributing to a 263.2 billlion shilling budget deficit for the fiscal year. "During the second quarter of 2011/12, a total of 15,622 new taxpayers were recruited. Cumulatively, during the first half of 2011/12, 37,679 new taxpayers were recruited," Michael Waweru, Kenya Revenue Authority's outgoing commissioner general, said. "The unfavourable economic environment experienced in the economy is likely to continue into the third quarter of 2011/12. A continuation of the trends witnessed in the first half will undermine revenue performance in the third quarter of the 2011/12 fiscal year." Kenya's inflation rate rose for 13 consecutive months to hit a high of 19.72 percent in November, before slowing in December, after the central bank aggressively raised lending rates. The revenue collector has set a revenue collection target of 733.4 billion shillings for 2011/12 fiscal year.
