President Uhuru Kenyatta has Wednesday announced that senior ranking officials of the National Executive have agreed to take voluntary pay cuts in order to free up funds towards the fight against the Coronavirus pandemic.
Speaking at State House in Nairobi, President Kenyatta stated that himself alongside Deputy President William Ruto will have their salaries slashed by 80%.
The Head of State added that Cabinet Secretaries and their Chief Administrative Secretaries would take 30% pay cuts.
He further stated that Principal Secretaries will, on the other hand, have their salaries reduced by 20%.
“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,” he stated.
President Kenyatta also directed that all State and Public Officers with pre-existing medical conditions and/or aged 58 years and above, those serving in Job group S take leave or work from home henceforth.
He said that this, however, excludes personnel in the security sector and other essential services.
In his address, he also said that the Central Bank of Kenya had additionally rolled out a raft of measures to caution Kenyans.
In this effect, the CBK has lowered the Central Bank Rate from 8.25% to 7.25%. This will prompt commercial banks to lower interest rates to their borrowers.
CBK also has lowered the Cash Reserve Ratio to 4.25% from 5.25% to provide additional liquidity of Ksh. 35Billion to commercial banks to directly support borrowers affected by the pandemic.
To further caution Kenyans, the National Treasury will reduce VAT from 16% to 14% effective 1st of April.
….”Kenya Revenue Authority shall expedite the payment of all verified VAT refund claims amounting to Ksh 10Billion within 3 weeks…in order to improve cashflows for businesses.”
A temporary suspension of the Credit Reference Bureau has also been effected as of 1st April 2020, any person, Micro, Small and Medium Enterprises (MSMEs) whose loan accounts fall overdue or is in arrears will not be listed.
The government in a bid to increase disposable income to Kenyans has given 100% tax relief for persons earning a gross salary of Ksh 24,000, reduction of Income Tax Rate (PAYE) from 30% to 25%, reduction of turnover tas rate from the current 3% to 1% for all MSMEs.
The elderly, orphans and other vulnerable members of our society through cash-transfers have also been cautioned through the appropriation of an additional Ksh 10 Billion, by the Ministry of Labour and Social Protection.