The Coronavirus (COVID-19) has had a significant impact on the global economy. With more than 1.4 million people infected globally, and 172 confirmed cases in Kenya, the government has implemented a raft of measures to address the pandemic.
In relation to taxes, the Government has proposed various tax-related measures including the following:
- Reduction of Personal Income Tax top rate (PAYE) from 30% to 25%
- 100% Tax Relief for persons earning up to Ksh. 24,000
- Reduction of Resident Corporate Income Tax rate from 30% to 25%
- Reduction of Turnover Tax rate for SMEs from 3% to 1%
- Immediate reduction of VAT rate from 16% to 14%
In addition, the Government has implemented the following measures:
- Suspension of all listing for all persons including companies at Credit Reference Bureau (CRB)
- Lowering of Central Bank Rate (CBR) to 7.2%
- Lowering of Cash Reserve Ration (CRR) to 4.2%
- Central Bank of Kenya to offer flexibility to banks on loans that were active as of March 2020 to maintain liquidity levels
- Facilitating expedited payment of VAT Refunds by allocating an additional Ksh. 10B
- Setting up a fund to which players in the Public and Private Sector are contributing in support of Government efforts
The Kenya Revenue Authority (KRA) has also deferred physical submission of documents and appearance before its teams and taxpayers will be duly notified of when they can appear in person. In the interim, taxpayers are advised to submit evidence of transactions through email@example.com.