Ugango, Partner Crowe Erastus & CoNairobi – March 26, 2020
Kenya government on 25 March 2020 has issued a range of measure to relieve
businesses and its citizens during the SARS-CoV-2 (COVID-19) pandemic. The
measures aim to protect jobs, provide certainty to employees and employers,
businesses and general public. They include:-
Added Tax rate has been reduced to 14% from 16% effective 1 April
employees, Pay As You Earn tax has been exempt 100% for incomes up to KES
24,000 ($240) and the higher tax rate of 30% reduced to 25%.
resident corporate businesses the corporate tax rate has been reduced to 25%
from the previous 30%.
small businesses and Medium enterprises in the Turnover Tax bracket
will have the Turnover Tax rate reduced from 3% to 1%.
senior citizens (elderly), Orphans and vulnerable, KES 10 billion has been set
aside for cash transfers as a cushion from adverse COVID-19 effects.
Central Bank of Kenya has reduced the Central Bank Rate (CBR) by 1 point to
7.25% which targets banks to reduce lending rates. Further the bank cash ratio
has been lowered by 1 point to 4.25% to avail additional liquidity and
stimulate further lending by banks especially to small businesses.
suspension from listing with Credit Reference Bureaus for businesses and
persons whose loans fall in arrears effective 1 April 2020.
Other measure to
provide businesses with much needed cash include expediting Value Added Tax
refunds by Kenya Revenue Authority (at least 10 billion in next 3 weeks)
and payment of verified pending bills by government (at least 13 billion in
next 3 weeks)