Kenya has spent 63.5% of tax revenues in the first two months of the current financial year to repay its creditors, Business Daily newspaper reported.

According to the latest treasury data, debt servicing costs reached nearly 177.95 billion Shillings ($1.5 billion) in July and August against 280.23 billion Shillings in tax receipts.

However, the share of tax receipts to debt servicing costs is marginally lower than 65.7% in the year-earlier period, signalling improved tax collections.

Kenya Revenue Authority (KRA) collected 149.62 billion Shillings in August and 130.6 billion Shillings in July, a growth of 19.36 percent and 7.19 percent, respectively, year-on-year.

Debt costs are projected to hit 1.39 trillion Shillings this financial year ending June 2023, which will take up two-thirds of the expected collection of 2.07 trillion Shillings in taxes.

(Editing by Seban Scaria