In his speech on 25 March 2020, the Kenyan President announced several measures intended to provide relief to businesses, employees and other taxpayers at large in the wake of the Covid-19 pandemic. Below is our summary of those measures. Specific Proposed Tax Measures:
- 100 per cent Tax Relief for persons earning gross monthly income of up to KShs 24,000;
- Reduction of Income Tax Rate (Pay-As-You-Earn) from 30 per cent to 25 per cent;
- Reduction of Resident Income Tax (Corporation Tax) from 30 per cent to 25 per cent;
- Reduction of the turnover tax rate from the current 3 per cent to 1 per cent for all Micro, Small and Medium Enterprises (MSMEs);
- Reduction of the VAT from 16 per cent to 14 per cent, effective 1st April,2020; and
- Kenya Revenue Authority (KRA) directed to expedite the payment of all verified Value Added Tax (VAT) refund claims amounting to
KShs 10 Billion within 3 weeks; or in the alternative, allow for offsetting of Withholding VAT, in order to improve cash flows for
businesses.
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