Reduction of VAT to Take Effect on April 1

A gazette notice by Ukur Yatani today has stated that the reduction of Value Added (TAX) from 16% to 14% taking on effect by April 1.

The pandemic that has been hitting the world Covid-19, has the world on an economic shake up across the globe, with world leaders taking measures to curb the situation.

In Kenya the president took upon himself to address the nation on the covid-19 situation and he touched on the national treasury and the KRA on reduction of taxes and other monetary matters.

With the past economical turmoil across the country this has brought a smile to WANJIKU during this time of the pandemic that has 31 individual cases registered with covid-19.

This are some of the tax issues on need be that are to be undertaken :

• 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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