President Uhuru Kenyatta has directed the National Treasury to reduce VAT from 16 to 14 per cent, starting April 1.
Uhuru on Wednesday said all ministries and departments have also been directed pay Sh13 billion worth of verified pending bills within three weeks.
This he said will play a key role in improving liquidity in the economy and ensure businesses remain a float by enhancing cash flows.
“In the same breath, we encourage the private sector to clear all outstanding payments amongst themselves within same period of three week,’ he said.
Uhuru said as a result the Kenya Revenue Authority shall expedite all payments of verified VAT refund claims amounting to Sh10 billion within three weeks or in the alternative allow for the offsetting of withholding VAT in order to improve cash flow for businesses.
“As I said last week, Sh1 billion from the Universal Health Kitty be immediately appropriated strictly towards the recruitment of additional health workers to support the management of the spread of this disease,” Uhuru said.
Uhuru said his administration was cognizant of the enormous local effect the pandemic has caused on its citizens.
He said to assure the right to enjoyment of social, civil and economic rights, his government has come up with targeted interventions to cushion Kenyans from the shocks of the pandemic.
I understand the anxiety this disease has caused to many families with a possibility of job losses and massive income loss, to protect these jobs I hereby order and direct 100 per cent tax relief for low income earners of up to Sh24, 000,” Uhuru said.
Uhuru said there will be a reduction of Pay As You Earn deduction from 3o percent to 25 per cent.
There will be a reduction of turnover tax rate from three per cent to one per cent for micro, small and medium entreprises and an additional Sh10 billion from the labour ministry to the elderly and orphans through cash transfers,” he said.
Uhuru added, “I direct a temporary suspension with listing of CRB of any person whose loan account fall due or in arrears effective April 1”.
