President Uhuru Kenyatta adressing the nation from State House, Nairobi on March 25. He spelt out new economic measures to cushion Kenyans from the effects of COVID-19.

In the backdrop of a presidential address that attracted massive backlash, President Uhuru Kenyatta has announced a raft of new economic measures to cushion Kenyans taking a beating from the disruption of their income flow by the outbreak of the novel coronavirus pandemic.

Speaking during a televised address, President Kenyatta announced that he alongside Deputy President William Ruto will be taking an 80% pay cut while Cabinet Secretaries and Chief Administrative Secretaries will be taking a 30% cut on their pay packages as will Principal Secretaries who will take home 20% less than their usual.

Besides the cuts on senior executive civil servants’ salaries, the President also announced a string of measures aimed at easing the strain on Kenyans feeling the heat.

The Head of State directed the National Treasury and the Kenya Revenue Authority (KRA) to;

  • Reduce VAT from 16% to 14%, effective April 1, 2020.
  • Reduce Income Tax Rate (PayAs-You-Earn) from 30% to 25%.
  • Effect 100 % Tax Relief for persons earning gross monthly income of up to Ksh. 24,000.
  • Reduce Income Tax (Corporation Tax) from 30% to 25%.
  • Reduce the turnover tax rate from the current 3% to 1% for all Micro, Small and Medium Enterprises (MSMEs).
  • Appropriate an additional Ksh10 Billion to 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 the COVID-19 pandemic.
  • Temporary suspension of the listing with Credit Reference Bureaus (CRB) of any person, Micro, Small and Medium Enterprises (MSMEs) and corporate entities whose loan account fall overdue or is in arrears, effective April 1, 2020.
  • The Kenya Revenue Authority to expedite the payment of all verified VAT refund claims amounting to Ksh10 Billion within 3 weeks; or in the alternative, allow for offsetting of Withholding VAT, in order to improve cash flows for businesses.

‘I recognize the anxiety that this pandemic has caused millions of Kenyan families; fearful of what the future may hold for them and their children and the possibility of job losses and loss of income weighing heavily on their minds,” said President Kenyatta.

The president also directed all ministries and departments to begin the process of paying Ksh13 Billion of the verified pending bills, within three weeks. He also impressed upon the private sector to pay up its pending bills within a similar timeframe.

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By the same token, the President also directed

  • That Ksh1 billion from the Universal Health Coverage kitty, be immediately appropriated strictly towards the recruitment of additional health workers to support in the management of the spread of COVID-19.
  • The Ministry of Health, the County Governments and the Public Service Commission to expedite the recruitment process of the additional health workers.
  • All-State and Public Officers with preexisting medical conditions and/or aged 58 years and above, serving in Job Group S and below or their equivalents, take leave or forthwith work from home excluding personnel in the security sector and other essential services.

See Also: World Bank and IMF to the Rescue as Kenya Faces Unprecedented Times

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Samuel Gitonga is a senior reporter at BUSINESS TODAY. Email: [email protected]

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