Covid-19: Relief for Kenyans as Uhuru cuts PAYE tax

He further ordered the reduction of VAT from 16% to 14% effective 1st April.

In Summary

•Uhuru said a reduction of coporation tax from 30 per cent to 25 per cent. A reduction of the turnover tax rate from three per cent to one percent.

President Uhuru Kenyatta./PSCU
President Uhuru Kenyatta./PSCU

President Uhuru Kenyatta has directed the Treasury to offer 100 per cent tax relief for persons earning a gross income of Sh24,000.

Pay As You Earn (PAYE) will also be reduced from 30 per cent to 25.

"There will be a reduction of the income tax rate from its maximum of 30 to 25 per cent," he said.

Uhuru said a reduction of corporation tax will be from 30 per cent to 25 per cent.

"There will also be a reduction of the turnover tax rate from three per cent to one percent," he said.

Uhuru also suspended the listing on CRB of any persons in micro small or medium enterprises whose loan accounts were due or in arrears effective April 1.

"..this is to protect jobs for our people and uncertainty for employers.." he said.

He further ordered the reduction of VAT from 16% to 14% effective 1st April.

Uhuru said all Ministries and Departments shall cause the payment of at least of Sh13 Billion of the verified pending bills, within three weeks from the date hereof.

"Similarly, and to improve liquidity in the economy and ensure businesses remain afloat by enhancing their cash flows, the private sector is also encouraged to clear all outstanding payments among themselves; within three weeks from the date hereof," he said.

He asked KRA to expedite payment of all verified tax refunds within next three weeks (amounting to Sh10 billion).

"...or in the alternative, allow for offsetting of Withholding VAT, in order to improve cash flows for businesses," he said.

He further asked the Treasury to release Sh1 billion from universal health coverage kitty to recruit additional health personnel.

Earlier,the President announced the full recovery of one Covid-19 patient.

"Today we have registered our first patient who has fully recovered from this virus," he said on Wednesday.

But he noted that Kenya has received confirmation of an additional three cases, bringing the tally to 28 confirmed cases.