Kenya announces VAT cut to cushion COVID-19 effects on economy
Kenya on Wednesday said it will cut the value-added tax rate to 14 per cent from 16 per cent as part of a series of measures to help cushion the economy from the impact of the coronavirus outbreak.
East Africa’s richest economy has so far confirmed 28 cases of the COVID-19 disease and its critical tourism and farm export businesses have been feeling the pinch from the economic impact of the coronavirus outbreak.
President Uhuru Kenyatta, who made the announcement, said that there will be 100 per cent tax relief for Kenyans earning a monthly income of up to 24,000 Kenyan Shillings ($226) to increase their disposable income.
“My administration has made and will continue to make targeted state interventions to cushion every Kenyan from the shocks arising from this coronavirus,” he said.Kenyatta also said the government will institute a daily curfew beginning on March 27 from 7 p.m. to 5 a.m. to curtail the spread of the virus.
On Monday, the central bank said it expected the economy to expand by 3.4 per cent this year, down from an initial estimate of 6.2 per cent, as the virus saps demand from trading partners like Europe, as well as disrupting supply chains and domestic production.
Meanwhile, the International Monetary Fund will provide $50 billion in emergency facilities to countries in sub-Saharan Africa by early April to mitigate the economic shocks of the coronavirus, including $10 billion in concessional loans for low-income countries.
“Our member countries need us more than ever,” the IMF said on its website Wednesday. “Discussions between IMF teams and country officials are advancing quickly.”The IMF has received requests for emergency financing from almost 20 countries and expects 10 additional countries to seek its help, it said. Most African countries have closed international borders and grounded planes as the case count has climbed to more than 2,000 confirmed cases in less than a month.