Starting mid next week, Kenyans will start paying less for essential commodities after the government gazetted the reduction of Value Added Tax to 14 percent Value Added Tax, down from 16 percent.
According to legal notice by Treasury Cabinet Secretary Ukur Yatani, the Value Added Tax (Amendment of the Rate of tax) was cited in line with President Kenyatta’s directive.
President Kenyatta, in a statement this week, reduced the tax rates in a bid to help the country citizens cope with these difficult times of Covid-19.
With the tax reduction, Kenyans will have to spend less on bills, food, and detergents, among other commodities.
“I recognize the anxiety that this pandemic has caused millions of Kenyan families, fearful of what the future may hold for them and their children. And the possibility of job losses and loss of income weighing heavily on their minds,” Kenyatta said.
The tax cut calls for strategic measures to save the country’s already ravaged economy given that the Kenya Revenue Authority had missed its target by Sh88.3 billion in the first six months of the 2019/2020 financial year.
Tuesday, Central Bank Governor Patrick Njoroge announced that the government had appealed to the Bretton Woods institutions for the rescue package, in the form of budget support, to help it deal with the cash crisis occasioned by the pandemic.