The National Treasury has moved to cut off COVID-19 tax relief measures effective from January, 2021 as it seeks to reinstate lost government revenues.
In a statement to newsroom on Friday, Treasury Cabinet Secretary Ukur Yatani says tax rates for pay as you earn (PAYE) along with value added tax (VAT) will be returning to old rates.
Corporate tax for value-Addition Ta along with the top individual income tax (PAYE) will revert to a higher 30 per cent from 25 per cent.
Meanwhile, the VAT rate will return to 16 per cent from the current 14 per cent.
Kenyans earning a gross salary of up to Ksh.24,000 will however continue enjoying government cushioning as the exchequer retains the waiver on all PAYE taxes.
The National Treasury is seeking to employ the tax reversals to recoup lost revenues as it projects a Ksh.65 billion revenue hit from the cushioning measures.
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