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Coronavirus: Uhuru announces new tax measures to cushion Kenyans from crisis

By Njange Maina
Wednesday, March 25th, 2020
President Uhuru Kenyatta has announced new tax measures to cushion Kenyans from covid-19 effects. Photo/PSCU
In summary

President Uhuru Kenyatta on March 25 ordered the Treasury to effect several tax measures to help Kenyans manoeuvre the Covid-19 crisis.

First, for people who earn a gross salary of Sh24,000 and below, the President announced a 100 per cent tax relief.

Secondly, effective April 1, the rate of income tax (PAYE) will be reduced from 30 to 25 per cent.

Thirdly, the Head of State ordered the reduction of corporation tax from 30 to 25 per cent.

Fourthly, Uhuru also slashed the turn over tax for all businesses from three to one per cent.

Fifthly, Uhuru announced appropriation of Sh10 billion to vulnerable citizens through cash transfers by the Labour Ministry.

For individuals and businesses negatively listed with Credit Referencing Bureaus (CRBs) effective April 1, Uhuru announced a suspension to allow them access loans.

Effective April 1, Uhuru ordered the Treasury to cut Value Added Tax (VAT) from 16 to 14 per cent.

By the next three weeks, Kenyatta ordered all State Departments and Ministries to pay at least Sh13 billion of pending bills.

The release will pump cash into the economy warding off scarcity of cash.

Uhuru urged the private sector to follow suit and clear outstanding payments.

Within 21 days, the Kenya Revenue Authority (KRA) to pay verified VAT refund claims amounting to Sh10 billion.

Alternatively, KRA to allow offsetting of withholding VAT. The measures will stimulate cash flow for businesses, Kenyatta said.

Salaries for senior executive staff will be reduced.

The President and his deputy William Ruto will have their monthly salary reduced by 80 per cent while Cabinet Secretaries will take 30 per cent salary cut.

Updates to follow

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