COVID-19, Caesar’s dues are due

Despite COVID-19,
Caesar’s dues are due…
Is your salary KShs 24,000 or less, no tax is deducted from your pay!
No commercial flights, bars and nightclubs are closed for business, restaurants are to sell only to
take-away customers, limited church congregations, no weddings, and funeral gatherings are limited
to 15 people. But where is that “no payment of taxes” order? Nowhere. We waited with bated breath,
until our good President announced a few measures in the late afternoon of 25th March 2020!
Prior to this announcement, a gross salary of KShs 24,000 would suffer
tax of KShs 1,583. Employees earning up to KShs 24,000 will therefore
receive their full pay without any tax deductions. It remains to be seen
whether employees earning more than KShs 24,000 per month will also
some savings due to this relief.
The highest rate of individual tax comes down from 30% to 25%
Most probably this is where the high-income earners will enjoy their
savings, and will therefore be denied the relief available to those earning up
to KShs 24,000 per month. Will those whose incomes range between
KShs 24,000 and KShs 47,000 enjoy any savings? The devil is in the
detail, so we wait and see the actual proposal to be placed before
Parliament, but a 5% saving on those high salaries is definitely welcome!
Turnover Tax drops
His Excellency said that this applies to all Micro, Small and Medium
Enterprises (MSMEs), which makes one question whether any large
enterprises have been subject to Turnover Tax, and why sole proprietors
have not received specific mention. Either way, a very positive move for the
MSMEs, considering the fact that most of them will generate very low
sales, if any, during this social-distancing period.
VAT rate drops from 16% to 14%
We expect an immediate 2% reduction in prices of most commodities
(electricity, processed foods, detergents, sanitizers, and internet facilities),
so hopefully the retailers indeed pass on this benefit to consumers instead
of increasing their retail prices with increasing demand. Most unprocessed
(or raw) foods as well as medicaments are VAT-exempt, and liquefied
petroleum gas is zero-rated, so there are no foreseeable changes in
pricing for these essentials.

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  • Andersen Tax has found a home in Kenya and provides a wide range of tax, valuation, financial advisory and related consulting services to individual and commercial clients.

  • Andersen Tax has found a home in Kenya and provides a wide range of tax, valuation, financial advisory and related consulting services to individual and commercial clients.

  • A tax return is a form or forms filed with a tax authority that reports income, expenses, and other pertinent tax information. Tax returns allow taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes.