The Globally recognized pandemic Corona virus has put economies of many countries to the test which they need measures to cushion economic effects. Many countries have put measures to cushion economic effects. Kenya has been on the forefront to put these measures in this era where Covid-19 has really affected the economy.
The Covid-19 has led to an economic re-lapse where jobs have been lost , salaries cut down and many industrial fields closed down totally. The government have put measures to improve on the economy following the president’s directive.
The measures the government put to wake up the economy shut down in order to save it were:
Opening of bars
Opening of bars which serve beers and alcohol was one of the steps which could go a long way in helping the economy. The brewery industry brings a huge amount to the country’s GDP and its closure brought about loss in millions of money.
Measures to cushion Tax
VAT (Value Added Tax)
The VAT retained up to 1st July 2021. VAT is added to products we buy for our day to day use. The money gained from VAT is used to provide subsidies to various companies manufacturing these products.
Resident Income tax
The national treasury considered retaining the resident income tax at 25% until 1st January 2021.
Tax relief
Tax relief of 100% given to low income earners particularly those earning a gross monthly income of 24,000 Kenyan shilling. The relief period was up to 31st December 2020.
Reduction of turnover tax rate
Cushioning Micro, Small and Medium-sized business Enterprises (MSMEs), the national treasury reduced the turnover tax rate from 3% to 1%.
Access to credit
To enhance the access to credit to micro, small and medium-sized enterprises, the National treasury directs to expedite the roll out of credit guarantee scheme in partnership with participating banks and as well as the development partners. This to ensure access to credit and increase the amount of lending by over 100 billion Kenyan shillings.
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