Tax Alert: President’s Proposals, March 2020

In the wake of the Covid-19 crisis and with an aim to protect jobs in the economy and also provide some certainty for employers, Kenya’s President Uhuru Kenyatta directed the National Treasury to move to Parliament to propose the following immediate reliefs and increase disposable income to workers through:

 

⦁ A 100% tax relief for persons earning monthly gross income of up to KES. 24,000.

⦁ Reduction of the maximum PAYE Rate from the current 30% to 25%.

⦁ Reduction of the Corporate Income Tax Rate from the current 30% to 25%.

⦁ Reduction of the Turnover Tax Rate from the current 3% to 1%.

⦁ Temporary suspension of CRB negative listings for loans due effective April 1st 2020.

⦁ Reduction of the VAT Rate from the current 16% to 14%.

 

Please note that these proposals are subject to Parliament’s approval. Effective dates, if passed, shall be communicated accordingly.