President Uhuru Kenyatta has petitioned the National Treasury to continue implementing measures that had been set aside to supporting small businesses and innovators, to cushion them against the impact of the ongoing 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 Sh24,000 and less for the rest of the year,” the President said.
To cushion MSMEs, Kenyatta has 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 rally for support comes even as Treasury Cabinet Secretary Ukur Yatani said the measures to cushion the economy were bearing fruits.
According to the CS, the country’s gross domestic product (GDP) has grown to 2.6 percent, defying expectations of growth in the negative territory of -1 percent.
According to CS, Kenya’s economic growth is currently the highest in Africa.
Yatani added that the country’s inflation rate also beat expectations and is currently lower than it was last year during a similar period.
Kenya’s inflation is currently at 2.3 percent, compared to 5 percent recorded at a similar period last year.
Source: Capital FM Kenya.