Most businesses in Kenya are struggling to meet their financial obligations due to changes brought about by the COVID19 pandemic. Some have slashed their employees’ salaries while others have laid off their workers as they strive to remain in business.
Accounting firm Deloitte Kenya recommends the suspension of corporate tax for 3-6 months to help companies navigate the unchartered territory.
The measure will “enable taxpayers to conserve their cash and be able to maintain their employees, pay their critical bills,” Bloomberg quotes Fred Omondi, tax and legal lead at Deloitte East Africa. The audit firm is also urging the government to suspend employees’ payroll tax for 3 to 6 months.
Deloitte has advised the Kenya Revenue Authority to put on hold VAT assessments and audits for low-risk businesses “to allow those taxpayers to focus on their businesses, rather than addressing reconciliation of records,” reports Bloomberg.
On Wednesday, Parliament approved President Kenyatta’s directive to reduce corporate tax from 30 percent to 25 percent among other fiscal changes aimed at easing the financial burden on Kenyan companies and households.
