GOOD NEWS AS KENYATTA SAYS COVID-19 TAX RELIEFS TO STAY

NAIROBI - Kenyans will continue enjoying the current tax relief extended by the government to cushion households and businesses against the Covid-19 pandemic for another three months.

But, some other tax reductions will be in place for much longer as they will lapse in July next year to coincide with the end of the government’s financial year.

This is after President Kenyatta directed the Treasury to consider retaining the Value Added Tax (VAT) rate at 14 percent until July 1, 2021.

VAT is charged on supply of taxable goods and services made or provided in Kenya. It’s also levied on imported taxable goods or services into Kenya, accounting for one of the major determinants of the cost of goods in the country.

The President also asked the Treasury to retain the income tax rate, also known as Pay As You Earn, and the resident income paid by companies at 25 percent until January 1, 2021.

He also asked Treasury to retain the 100 percent tax relief for people earning a gross monthly pay of up to Sh24, 000 beyond the end of the year, which was the deadline for the tax holiday.

Small businesses will also continue paying a reduced turnover tax. “To continue cushioning our micro, small and medium enterprises, the Treasury considers maintaining the reduction of the current turnover tax from three per cent to one per cent,” the President said at the end of Monday’s Covid-19 conference.

To enhance access to credit for small businesses, Kenyatta directed Treasury to speed up the roll-out of the credit guarantee scheme in partnership with participating banks and development partners.

“The credit guarantee scheme as approved by Cabinet is a risk-sharing partnership between the government and the banks, which will afford our enterprises across the country access to credit,” he said. – DAILY NATION, Kenya.