KENYA President Uhuru Kenyatta on Wednesday announced measures to cushion Kenyans from Covid-19 economic effects in which he talked about reduction of his salary and salaries of the senior ranking officers of the National Executive with immediate effect.
This comes at a time when fighting the spread of Coronavirus in Kenya has intensified, with fresh orders, effective today Friday, March 27th, 2020, a daily curfew from 7pm to 5am shall be in effect in the territory of the Republic of Kenya, with all movement by persons prohibited.
Those whose movements won’t be interfered with are the medical Professionals, Health Workers, Critical and Essential Services Providers and security teams.
In neighbouring Kenya, March 25th 2020 marked 12 days since their first confirmed case of Coronavirus.
Addressing Kenyans on cutting government officials’ salaries Uhuru said, “In sharing the burden occasioned by the present global health pandemic, over the duration of the global crisis and commencing immediately, my Administration has offered a voluntary reduction in the salaries of the senior ranking officers of the National Executive.”
“The President & Deputy President’signing salaries will be reduced by 80%, Cabinet Secretaries 30%, Chief Administrative Secretaries 30% and Principal Secretaries by 20%.” Ordered Uhuru Kenyatta saying, “My Administration has made and will continue to make targeted state interventions to cushion every Kenyan from shocks arising from COVID-19.”
He said, he recognizes the anxiety that this pandemic has caused millions of Kenyan families; fearful of what the future may hold for them and their children.
And also, the possibility of job losses and loss of income weighing heavily on their minds.
PRESIDENT UHURU’S FULL SPEECH
In order to protect jobs for our people and to provide some certainty for both employees and their employers, I, as your President, ORDER and DIRECT as follows:
- That the National Treasury implements the following immediate reliefs and increase disposable income to the people of Kenya, through:
(i). 100 % Tax Relief for persons earning gross monthly income of up to Ksh. 24,000.
(ii). Reduction of Income Tax Rate (Pay-As-You-Earn) from 30% to 25%.
(iii). Reduction of Resident Income Tax (Corporation Tax) from 30% to 25%;
(iv). Reduction of the turnover tax rate from the current 3% to 1% for all Micro, Small and Medium Enterprises (MSMEs);
(v). Appropriation of an additional Ksh. 10 Billion to the elderly, orphans and other vulnerable members of our society through cash-transfers by the Ministry of Labour and Social Protection, to cushion them from the adverse economic effects of the COVID-19 pandemic;
(vi). Temporary suspension of the listing with Credit Reference Bureaus (CRB) of any person, Micro, Small and Medium Enterprises (MSMES) and corporate entities whose loan account fall overdue or is in arrears, effective 1st April, 2020.
- The National Treasury shall cause immediate reduction of the VAT from 16% to 14%, effective 1st April,2020;
- That all Ministries and Departments shall cause the payment of at least of Ksh. 13 Billion of the verified pending bills, within three weeks from the date hereof. Similarly, and to improve liquidity in the economy and ensure businesses remain afloat by enhancing their cash flows, the private sector is also encouraged to clear all outstanding payments among themselves; within three weeks from the date hereof.
- That the Kenya Revenue Authority shall expedite the payment of all verified VAT refund claims amounting to Ksh. 10 Billion within 3 weeks; or in the alternative, allow for offsetting of Withholding VAT, in order to improve cash flows for businesses.
- That Ksh. 1.0 billion from the Universal Health Coverage kitty, be immediately appropriated strictly towards the recruitment of additional health workers to support in the management of the spread of COVID-19.
In that regard, I further direct the Ministry of Health, the County Governments and the Public Service Commission to expedite the recruitment process.
- I call on the other arms of Government and tiers of Government to join us in this national endeavour, by making similar voluntary reductions; which will free-up monies to combat this pandemic.
- Further to the guidelines issued encouraging State Agencies to establish and implement frameworks for staff to work from home;
- I hereby order and direct that all State and Public Officers with pre-existing medical conditions and/or aged 58 years and above, serving in Job Group S and below or their equivalents, take leave or forthwith work from home, excluding personnel in the security sector and other essential services as outlined in the circular issued to the Public Service on 16th March, 2020.
ON LOANS & INTEREST RATE
The Central Bank of Kenya has additionally rolled out the following Measures:
9 (i) The lowering of the Central Bank Rate (CBR) to 7.25% from 8.25% which will prompt commercial banks to lower the interest rates to their borrowers, availing the much needed and affordable credit to MSMEs across the country.
9 (ii) The lowering of the Cash Reserve Ratio (CRR) to 4.25 percent from 5.25 percent will provide additional liquidity of Ksh. 35 Billion to commercial banks to directly support borrowers that are distressed as a result of the economic effects of the COVID-19 pandemic.
9 (iii) The Central Bank of Kenya shall provide flexibility to banks with regard to requirements for loan classification and provisioning for loans that were performing as at March 2,2020 and whose repayment period was extended or were restructured due to the pandemic.
Every time we have been faced with adversity Kenyans have coalesced together and pulled each other out of the situation.
Our nation shall prevail, the aspirations of our destiny shall stand. Together we shall be victorious, Pamoja tutashinda. We can and we shall defeat the Coronavirus Pandemic.
God Bless each and every one of us, and God Bless Kenya.