Image default

Treasury to reinstate pre-Covid tax rates

Effective January 1, Treasury CS Ukur Yatani has announced that the country will return to the pre-Covid-19 taxes. The CS, in a statement sent to newsrooms, stated that this move will enable the implementation of government budget. “These moves,” he said, “were necessitated by the ease of some of the Covid-19 containment measures and subsequent resumption of normalcy.”

The tax relief was implemented in April this year after the President directed the Treasury to do so in order to cushion Kenyans during the pandemic period.

The CS has also announced that the government will continue cushioning Kenyans earning less than Sh24,000 through 100% Pay As You Earn (PAYE) tax relief. “However, the government will continue to cushion the low-income earners, by retaining 100 per cent tax exemption/relief for those earning monthly incomes of Sh24,000 and below,” Ukur Yatani noted.

The VAT which was reduced from 16% to 14%, which will now revert to 16%. Corporate Tax rate will revert to 30% from the current 25%. Individual Income Tax rate will revert to 30% from the current 25%. The CS also reiterated that the government is not introducing new taxes but restoring the pre -Covid-19  taxes.

Part of the Press statement by the CS

The government had last month released an economic recovery strategy post Covid-19 and a proposal to an Unemployment Insurance Fund was brought up in which employed Kenyans will be required to contribute 1% of their income to the Fund in order to cushion unemployed Kenyans while Employers will also contribute 1% bringing the total to 2%

Related posts