President Uhuru Kenyatta yesterday in his press asdress made some significant changes in tax reduction.
In a move to help Kenyans cope with the pandemic that is Coronavirus, the national treasury will now move to parliament to offer an increased disposable income to the people of Kenya through:
- 100% tax relief for persons earning a gross monthly income of up to ksh24000
- Reduction of income tax rate Pay As You Earn (PAYE) from from 30% to 25%
- Reduction of resident income tax or corporation tax from 30% to 25%
- Reduction of turnover tax rate from 3% to 1 % for all micro small and medium enterprises.
- Addition of Ksh10B for the elderly, orphans and other vulnerable members of the society through cash transfers by the ministry of labour and social protection to cushion them from the adverse economic effects of COVID -19
- Temporary suspension of listing on the Credit Reference Bureau of any person, micro, small or medium enterprises as well as corporate entities whose loan is due or is in arrears effective 1st April.
- Reduction of Value Added Tax (VAT) from 16% to 14% effective 1st April 2020
- All ministries and departments to pay at least ksh13B of the verified pending bills within three weeks to improve liquidity in the economy to enable businesses stay afloat, the president also encouraged private sectors to clear outstanding payments within themselves within three weeks.
- Kenya Revenue Authority (KRA) to expedite the payment of all VAT refund claims amounting to Ksh10B within 3 weeks or allow offsetting of withholding VAT in order to improve cash flow for business.
- Ksh1B from universal health kitty to be immediately appropriated towards the recruitment of health workers to support the management of the spread of Coronavirus.
All these measures have been taken to help Kenyans to help kenyans to cope with the hard economic situation during the outbreak of the deadly Coronavirus.