Kenya: Tough Times for Kenyans As National Assembly Approves Reversal of Key Tax Rates

Nairobi — Kenyans will face tough times from January following the reversal of tax rates that were reduced as part of the government’s stimulus package in March due to the COVID-19 pandemic.

The National Assembly on Tuesday approved the reversal of the key tax rates which will take effect in January 2021, signaling tough times ahead at a tie the economy is struggling to revive.

Members of the National Assembly were focusing on the proposed reversal of Pay as You Earn (P.A.Y.E) and Corporate Tax from 25 percent to the normal 30 percent and Value Added Tax (VAT) to 16 from 14 percent.

“Pursuant of provisions of sections 6 and 67 of the Value Added Tax Act 0f 2013 approves the Value Added Tax Amendment of the rate of tax 2020, will as many of that opinion say eye and will as many of contrary opinion say nay, the eyes have it,” Speaker of the National Assembly said.

The majority of MPs led by Garissa Township MP Aden Duale and his Homabay Counterpart Peter Kaluma supported the motion saying the taxes are the country’s main source of revenue.

“This is a source of revenue that we could ill afford to reduce. We are now in a situation where we cannot afford to pay for essential services and we do not know when those situations will end. We now have reduced time for trade among other things,” Kaluma said.

“No we only have the option of borrowing and we also know the pressures of repaying those loans a cry we have had before.”

Kikuyu MP Kimani Ichung’wa was however, opposed to the motion saying Kenyans are still feeling the effect of the Coronavirus pandemic thus they should continue being cushioned.