Uhuru’s tax relief will only be effected when bill is signed into law – KRA

Times Tower. [Photo NMG]

Up and Until the National Assembly ratifies President Uhuru Kenyatta’s tax exemption into law, Kenyan workers will have to part with hefty tax cuts, Kenya Revenue Authority says.

President Uhuru Kenyatta in March exempted workers earning Ksh24,000 and below from taxation  whilst also reducing the minimum income tax popularly known as PAYE from 30 percent to 25 percent.

Uhuru also ordered for the reduction of Value Added Tax (VAT) from 16 percent to 14 percent.

KRA in a statement on Wednesday maintained that: “Please note the PAYE rate is now a bill that is yet to be assented to. Use the old rates until such a time when Parliament will pass the bill into law.”

The taxman was responding to questions by Kenyans who are preparing payrolls for the month of April.

@KRACare kindly clarify the rates to be used for paye computation,” a   tweep requested.

In Uhuru’s tax  relief, corporation tax had also been reduced from 30 percent to 25 percent  while small-scale traders and medium enterprises were required to pay one  percent turnover of their total income. It came  down from three percent in January.

Uhuru had said that the move was geared towards cushioning Kenyans from the economic shocks caused by COVID-19 pandemic.

Parliament last week converged with just a handful MPs to debate the Bill which has yet again opened a supremacy in the bicameral parliament.