National Treasury on Reduction of Tax

The president noted.

In recognition of the extra-ordinary nature of this global tragedy and its enormous local effects, and conscious of the solemn duty of the Government to guarantee the enjoyment of social, civil and economic rights; my Administration has made and will continue to make targeted state interventions to cushion every Kenyan from shocks arising from Covid-19.

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.

In order to protect jobs for our people and to provide some certainty for both employees and their employers, I, as your President, ORDER and DIRECT as follows:

These policy measures and behavioral protocols continue to dramatically change our way of life.  Additionally, various State Agencies and Private Sector Entities have complemented our efforts by implementing further measures, which we appreciate and applaud.

The measure that are to  taken on tax reduction are as:

• 100 percent tax relief for persons earning gross monthly income of up to Ksh. 24,000.
• Reduction of Income Tax Rate (Pay-As-You-Earn) from 30 percent to 25 percent.
• Reduction of Resident Income Tax (Corporation Tax) from 30 percent to 25percent;
• Reduction of the turnover tax rate from the current 3 percent to 1percent for all Micro, Small and Medium Enterprises (MSMEs);
• Appropriation of an additional Ksh. 10 Billion to the elderly, orphans and other vulnerable members of our 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.
• The National Treasury shall cause immediate reduction of the VAT from 16 percent to 14 percent, effective 1st April,2020;
• 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 1st April, 2020.

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