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Uhuru cushions Kenyans against economic effects of Covid-19

Author: Staff Writer | Published: Wednesday, March 25, 2020

Construction workers at work in Kenya | Credit | The Standard

Kenya’s President Uhuru Kenyatta announced a 100 percent tax relief for Kenyans earning gross salary of less than Sh. 24,000 or $240 as coronavirus cases increase in the neighboring country.

The first case of Coronavirus infection within Kenya’s borders was reported on 13 March 2020.

The announcement of tax relief comes after the sharp increase in the number of Covid-19 positive patients.

As of today, Wednesday, 25 March 20202, there are 24 confirmed coronavirus cases in Kenya.

With the government forced to implement quarantines and stay-at-home orders, which have already had negative consequences on spending in shopping malls, markets and restaurants.

Like other businesses, informal sector business have ended up with a reduction in customers because of the pandemic.

The tax relief is aimed at cushioning low-income workers against the impact of the coronavirus.

Majority of Kenyans who earn such an amount are categorized under the informal sector which thrives in rural and urban centers, which translates to about 11.8 million, according to 2015 estimates.

Uhuru has also reduced income tax down from 30 percent to 25 percent.

In addition, members of the cabinet will take pay cuts to “share the burden occasioned by the global health pandemic”, President Kenyatta announced on Wednesday.

The salary reductions, Daily Nation reports, will be as follows: the President and Deputy President – 80 percent, Cabinet Secretaries – 30 percent, Chief Administrative Secretaries – 30 percent, and Principal Secretaries – 20 percent.

Facing an economic maelstrom, global economies have begun to deliver a robust fiscal response to tackle the coronavirus outbreak.

Some nations across the world have come up with a mixture of tax incentives, loan guarantees, wage subsidies in order to shield their citizens as well as its enterprises from the devastating effects of the pandemic.

France

The Emmanuel Macron government has launched an exceptional and massive initiative to pay workers, who have lost jobs due to the coronavirus mayhem.

On March 17, the president guaranteed $335 billion worth of loans to help businesses get through the coronavirus crisis.

UAE

UAE has launched fresh initiatives under “Ghadan 21” to boost small and medium enterprises. The country has pledged $100 billion dirham ($27.2 billion) to fight the coronavirus outbreak.

This includes 5 billion dirham of water and electricity subsidies for citizens and industries. The UAE has also curbed toll taxes till the end of 2020.

3 billion dirham has been allocated to SME credit guarantee scheme. The stimulus package also includes 1 billion dirham to establish market funds to enhance liquidity.

Lastly, the government has also announced 20 per cent refund on rent paid by tourism and entertainment sector.

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