You are likely to continue to enjoy the lower tax rates introduced by the government in March this year to cushion Kenyans against the adverse effects of the Coronavirus pandemic if legislators reject a proposal from the National Treasury to review some of the tax breaks.
National Treasury Cabinet Secretary Ukur Yatani, however, says the tax breaks including lower VAT at the rate of 14 per cent and income tax of up to 25 per cent should be reviewed because some benefits are not being trickled to consumers.
To cushion Kenyans from the effects of Covid-19 pandemic, President Uhuru Kenyatta announced various tax relief measures such as a lower VAT of 14 per cent, reduced income tax and corporation tax of up to 25 per cent.
The tax relief measures which were viewed as a short term measure could run indefinitely if Parliament rejects proposals by the National Treasury to review the tax breaks.
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To rejuvenate the economy, Yatani has proposed Ksh10 billion for employment of 200,000 youths under the Kazi Mtaani programme in major towns across the country.
Parents and guardians are also a happy lot after the government allocated four billion shillings for waiving examination fee for KCPE and KCSE and employment of 15,000 teachers in efforts to reduce the teacher-learner ratio.
Local enterprises and Micro, Small and Medium Enterprises also received a boost after the government promised to gazette and enforce the list of items for local procurement to promote the “Buy Kenya Build Kenya” Initiative.
All inputs for the manufacture of baby diapers will be imported duty-free under East African Community Duty Remission Scheme.
Inputs for assembly or manufacture of mobile phones, the textile and apparel sector will be duty-free.
Maize or corn seeds have been exempted from VAT in order to make them affordable to farmers.
To reduce reliance on foreign contractors for key infrastructural projects, Yatani said plans are underway to review the procurement policy framework in the construction sector in favour of awarding tenders to local contractors, which is expected employ more Kenyans.
Pensioners are also a happy lot after the government has committed to clear all pension payment backlog by December this year.
Tax returns
To enhance tax compliance, a voluntary disclosure programme has been introduced to allow Kenyans who, in the last five years may have inadvertently made omissions in their tax returns to voluntarily disclose such omission and pay the tax due.
“The programme will run for three years. In order to encourage uptake of this programme, I further propose 79 to grant relief for penalties and interest in respect of the tax disclosed after payment of the principal tax” said the CS.
