Uhuru, Ruto take 80% pay cut, low earners get tax relief – VIDEO
President Uhuru Kenyatta and his Deputy William Ruto have taken an 80 percent pay cut in the face of coronavirus pandemic.
The president also announced that all Cabinet Secretaries and Chief Administrative secretaries 30 percent while Public Secretaries will 20 percent less.
At the same time, he urged the Central Bank of Kenya to move to parliament and enact the reduction of turnover tax rate from three percent to one percent for all micro small and medium enterprises.
The Head of State also directed the treasury to offer 100 percent tax relief for persons earning a gross income of Sh24000 and reduction of VAT from 16 percent to 14 percent effective April 1.
He also recommended that the highest tax bracket be reduced from 30 percent to 25 and corporation tax from 30 percent to 25 per cent.
In a state of the nation address on Wednesday evening, the president also urged MPs to suspend the listing on CRB of any persons in micro small or medium enterprises whose loan accounts were due or in arrears effective April 1.
“This is to protect jobs for our people and uncertainty for employers as we face this epidemic,” he said.
Last week, Central Bank of Kenya Governor Patrick Njoroge issued a statement on the measures banks are taking to mitigate the adverse economic effects of coronavirus.
Njoroge stated banks have agreed to extend the payment period for personal loans to provide relief for borrowers.
His administration has been under pressure to roll out economic interventions to salvage the economy and cushion Kenyans against the effects of the coronavirus.
Economists, the civil society and professional bodies want the government to come up with an economic stimulus package to support the private sector to remain afloat and secure vulnerable jobs.
Interventions from a fiscal perspective would include reducing the taxes paid by companies and individuals to respectively lower the cost of operations and stimulate consumption.
There has been panic among Kenyan employees concerning the future of their jobs and livelihood as cases of coronavirus in the country continue to rise.
The coronavirus pandemic, which has caused more than 19,000 deaths worldwide, has seen many employees work from home in a bid to curb the spread of the disease.
As other employees are working remotely, some have been forced to take unpaid leave or even pay cuts.