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KRA PAYE and VAT Rates in 2020

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Kenya Revenue Authority KRA PAYE and VAT Rates in 2020

KRA New PAYE and VAT Rates in response to COVID-19

Taxes play a fundamental role in Kenya’s sovereignty. We significantly fund our national budget though Taxes. To mitigate the effects of COVID – 19 to the Kenyan economy, the Government has proposed various measures including the following:

  • Reduction of Personal Income Tax top rate (PAYE) from 30% to 25%
  • 100 % Tax Relief for persons earning up to Ksh. 24,000
  • Reduction of Resident Corporate Income Tax rate from 30% to 25%
  • Reduction of Turnover Tax rate for SMEs from 3% to 1%
  • Immediate reduction of VAT rate from 16% to 14%

Further to this, the Government has implemented the following measures:

  • Suspension of all listing for all persons including companies at Credit Reference Bureau (CRB)
  • Lowering of Central Bank Rate (CBR) to 7.2%
  • Lowering of Cash Reserve Ration (CRR) to 4.2%
  • Central Bank of Kenya to offer flexibility to banks on loans that were active as of March 2020 to maintain liquidity levels
  • Facilitating expedited payment of VAT Refunds by allocating an additional Ksh. 10B
  • Setting up a fund to which players in the Public and Private Sector are contributing in support of Government efforts

As the Country faces this global health challenge, all citizens are called upon to play their part. Therefore, we are encouraging all taxpayers to continue paying all taxes due to support the Government in provision of critical services. Taxpayers are required to determine correctly their tax liability and remit the same in a timely manner.

On its part, KRA will continue supporting individuals and businesses in accessing our services to ensure all taxes are paid in a timely manner at this critical time. KRA will decisively handle any matter that pertains to deliberate non-payment of taxes. In the event that a taxpayer is not able to honour the agreed payment plan, it’s mandatory that the same is reviewed and agreed with our debt team.

KRA appreciates that taxpayers are required to provide proof of transaction in response to VAT inconsistency reports. Taxpayers are supposed to submit documents and in some instances appear in person at our premises. This is not tenable in the current environment.

To mitigate this, KRA has deferred the physical submission of documents and appearance before our teams. Taxpayers will be duly notified of when they can appear in person. In the interim, taxpayers are advised to submit evidence of transactions through callcentre@kra.go.ke.

We are also encouraging taxpayers to access our tax services on our online platforms.

COMMISSIONER GENERAL

 

Source: Trending.co.ke




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