President Uhuru Kenyatta has implored the National Treasury to extend tax reliefs, which took effect in April to Kenyans hit by the coronavirus pandemic.
Speaking during the National COVID-19 Conference Monday, Kenyatta directed the National Treasury to consider retaining the VAT at 14 percent until the first of July 2021.
Treasury has also been asked to retain the income tax rate, Pay-As-You-Earn, at 25 percent until the first of January 2021 and retain the corporate tax at 25 percent until January 2021.
“To protect low-income earners, I am asking the National Treasury to maintain the 100 percent tax relief of those earning KSh24,000 and less for the rest of the year,” the President said.
President Kenyatta further asked the treasury to continue maintaining the reduction of the current turn-over-tax from 3 percent to 1 percent.
Treasury has also been directed to expedite the ongoing rollout of the credit guarantee scheme in partnership with participating banks to support MSMEs with increased access to credit.
“The credit guarantee scheme as approved by Cabinet is a risk-sharing partnership between the Government and banks, which will afford our enterprises access to credit by an additional 100 billion shillings,” said the President.
During the conference, National Treasury Cabinet Secretary Ukur Yatani disclosed that the country’s economy is growing at 2.6 percent.
”We were forced to revise our economic growth prospects to negative one percent in view of Covid-19. I am happy to report that we are currently at 2.6 percent, highest in the region,’’ Yatani said.
Similarly, the Central Bank of Kenya’s additional measures to support the economy by reducing Cash Reserve Ratio (CRR) to 4.25 percent from 5.25 percent, releasing KSh35.2 billion as additional liquidity for banks to directly support borrowers.