Kenyans are headed for tougher times as the government removes the COVID-19 tax relief, come the end of next month.
National Treasury Cabinet Secretary Ukur Yatani on Wednesday said the monthly Pay-As-You-Earn (Paye) deducted from salaried employees will revert to 30 per cent from 25 per cent in January.
The corporate tax for companies will go back to 30 per cent from the current 25.
The government is also expected to revert the Value Added Tax (VAT) to 16 per cent from the current 14 per cent. This translates to increased prices of fuel, food, drugs and other basic commodities will shoot up.
Speaking after launching public sector hearings on the 2021/22 financial year budget in Nairobi, CS Yatani said the measures are intended to increase the country’s revenue.
“The government will continue to review the prevailing economic situation and institute measures that ensure we protect lives and livelihoods while upholding a stable macroeconomic environment,” he said.
Also to be scrapped is the provision that saw those earning less than 24,000 exempted from taxes.
He said the government has cut this year’s national economic growth outlook by 0.6 per cent.
The CS added that the government will make a decision in January on whether to join the controversial International Monetary Fund (IMF) support programme.
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