Kenya Announces Widespread Tax Cuts to Ease Virus Impact

President Uhuru Kenyatta in a speech on national TV announced a series of measures to ease the impact of the coronavirus and free up cash to manage the outbreak, including a VAT reduction and tax relief for businesses and individuals.

• National Treasury is preparing immediate tax relief for individuals and businesses including:
  • Reduction of maximum income tax rate or Pay As You Earn tax to 25% from 30%
  • Reduction of corporation tax to 25% from 30%
  • Sales tax rate to be cut to 1% from 3% currently for micro, small and medium businesses
  • Value Added Tax to be cut to 14% from 16% from April 1
  • 100% tax relief for people earning a gross monthly income of 24,000 shillings
• Kenyatta and his deputy, William Ruto, will take a 80% pay cut effective immediately, while wages of cabinet secretaries will be slashed by as much as 30%
• Nation also suspends the listing of individual, corporate loan defaulters at credit reference bureaus effective April 1
• Kenya’s tax authority will expedite payments of all verified VAT refund claims
• Authorities to impose curfew from 7pm to 5am from March 27
• NOTE: Kenya Central Bank Cuts Benchmark Rate to 7.25% From 8.25%

To contact the reporters on this story:
Bella Genga in Nairobi at bgenga2@bloomberg.net;
Samuel Gebre in Addis Ababa at sgebre@bloomberg.net

To contact the editors responsible for this story:
David Malingha at dmalingha@bloomberg.net

Pauline Bax, Andre Janse van Vuuren

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