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Uhuru slashes taxes in plan to ease pain of coronavirus : The Standard

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President Uhuru Kenyatta addresses the nation from State House, Nairobi, yesterday. [Courtesy]

President Uhuru Kenyatta has announced a raft of tax cuts as the government seeks to cushion households and companies from the crippling effects of the coronavirus pandemic.

The tax relief options mainly target low-income earners, and include cuts in Pay as You Earn (PAYE), value-added tax (VAT), turnover tax (TOT) and corporate tax.
Those earning a gross salary of up to Sh24,000 a month will be granted full tax relief on PAYE.
Other employees will, however, benefit from a reduction in PAYE from 30 per cent to 25 per cent, after the president instructed Treasury Cabinet Secretary Ukur Yatani to come up with a mini-Budget that should also see the levy on corporations’ profits – corporate tax – go down by a similar margin.

SEE ALSO :China virus cases spike, 17 new infections reported

Loss of income
“I recognise the anxiety that this pandemic has caused millions of Kenyan families, fearful of what the future may hold for them and their children, and the possibility of job losses and loss of income weighing heavily on their minds,” said President Kenyatta from State House yesterday.
He gave small businesses a reprieve in his proposal to reduce TOT from 3 per cent to 1 per cent. The tax was introduced in January this year for businesses whose annual gross sales are below Sh5 million.

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As the business environment slows down and workers’ job security gets uncertain, the president sought to inject more money into the economy to keep its wheels rolling.
The proposed reduction in VAT from 16 per cent to 14 per cent will be reflected in the prices of commodities, such as toilet paper, juice and shoes.

SEE ALSO :China confirms virus spreading between humans

Further, the elderly, orphans and people living with disabilities are also set to receive an additional Sh10 billion that will be disbursed through cash-transfer programmes under the Ministry of Labour and Social Protection.
These measures came on the back of Uhuru’s announcement that the country has registered its first fully recovered patient from Covid-19, the disease caused by the new coronavirus.
However, three more people tested positive for the disease, bringing the total number of confirmed cases to 28.
In a televised address yesterday evening, Uhuru directed the Treasury to begin the legislative process that will see the relief measures effected from April 1.
Lenders have also been instructed to suspend the listing of individuals, entrepreneurs and corporate entities with credit reference bureaus (CRBs) if they default on their loan facilities as at April 1.

SEE ALSO :Factbox: What we know about the new coronavirus spreading in China and beyond

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Cash flow
SMEs and private sector players are also expected to benefit from the president’s directive to public offices to settle Sh13 billion in pending bills within the next three weeks.
“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,” said the president.
The Kenya Revenue Authority (KRA) has also been put to task to settle payments of all verified VAT refund claims owed to the private sector amounting to Sh10 billion within three weeks to improve business’ cash flow.
The government will also recruit additional healthcare workers to support the management of the spread of Covid-19, with the Treasury asked to allocate Sh1 billion from the Universal Health Coverage kitty.

SEE ALSO :Travelers to be screened for ‘Chinese’ coronavirus- Government

In a speech calling for unity, the president vowed to continue with “targeted State interventions” to defeat the virus.
“If these measures are deemed to be inadequate, we shall without hesitation take even further and more drastic measures to ensure that the cardinal duty of the State, which is the protection of property and lives, is assured.”.
The measures come at a time when the Central Bank of Kenya (CBK), which been doing the heavy-lifting since the country confirmed its first coronavirus case 13 days ago, revised economic growth projections for the year to 3.4 per cent from a baseline of 6.2 per cent.
It will be the slowest growth since 2009, when the size of the economy expanded by 2.7 per cent.
Already a cash-strapped Kenya has sought the financial help of the World Bank and International Monetary Fund to the tune Sh122 billion, which will be used to deal with the health and economic impact of the pandemic.
Meanwhile, the president, his deputy and senior members of the Executive will have the voluntary option of taking a pay cut to free up funds to fight the pandemic.


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Capital Markets industry plans to manage COVID 19 pandemic.

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The capital markets industry stakeholders have unveiled a raft of measures designed to ensure business continuity and manage effects of COVID 19 pandemic.

Top on the list is to ensure trading and settlement systems continue functioning to support transactions.

The CMA Acting Chief Executive, Mr Wyckliffe Shamiah, said the Authority is allowing the progression of some of the activities usually sanctioned during Annual General Meetings (AGMs) for listed companies.

Given the need to postpone AGMs, to help eligible shareholders access dividends during these difficult circumstances, the respective Boards of issuers of securities have been allowed to proceed to declare and pay the dividends to their shareholders. This will be subject to the companies’ dividend policies, procuring all other relevant internal approvals, and making available the audited financial statements to CMA, Nairobi Securities Exchange (NSE) and the public in the prescribed channels as explained in an earlier guidance

Mr Wyckliffe Shamiah, CMA Acting Chief Executive

The Boards of listed companies have also been allowed to progress the appointment and remuneration of auditors.
Board decisions on these matters will need to be tabled at the AGMs, once convened, for ratification.

To ensure normal operations continue at the Nairobi Securities Exchange (NSE), the NSE Chief Executive, Mr. Geoffrey Odundo, said the business continuity plan of the Exchange has been operationalized to support online and mobile trading.

Additionally, market players have successfully been working remotely with trading systems accessed via Virtual Private Networks.

The Central Depository and Settlement Corporation (CDSC) Chief Executive, Mr. Nkoregamba Mwebesa, adds that through its Business Continuity Plan, CDSC has ensured settlement continues through secure remote links with all settlement participants.

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Mr. Mwebesa added that CDSC is still offering all other depository services to Central Depository Agents and other stakeholders. These measures are aimed at ensuring that investors have remote access to the market through various channels, with the ability to easily buy or sell their securities with minimal physical movement and contact in line with the Ministry of Health Directives.

The Kenya Association of Stockbrokers and Investment Banks (KASIB) Chief Executive, Mr. Willie Njoroge, welcomes the support from the Authority, which has authorized and shall continue to guide, monitor and regulate the use of Automated customer onboarding processes to reduce the need for physical verification of documents and in-person visits while facilitating easy access to the market by investors.

The Fund Managers Association (FMA) Chairman, Mr. Jonathan Stichbury, says the association through its member firms will continue to operate and actively invest in the Kenyan capital markets on behalf of their institutional and retail clients – and to support the proper functioning of the capital markets.

RELATED;

CMA Relaxes Disclosure Obligations

NSE Opens Remote Access to Its Platforms

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Ban on flights extended as State confirms 16 new cases : The Standard

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The government has extended the ban on international flights by 30 days as it confirmed 16 new cases of coronavirus.
The total tally of persons who have tested positive for the disease now stands at 142.
There have been four deaths while four patients have recovered. 

SEE ALSO: We’re shooting ourselves in the foot on covid-19 pandemic

Suspension on prison visits has also been extended by 30 days starting today.
The extension of ban on international flights follows the expiry of an earlier one of 14 days, which ended yesterday.
Transport Cabinet Secretary James Macharia said the decision was reached after a meeting with the National Emergency Response Committee on Kenya’s situation to which he is a member.

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The suspensions, as has been the case, exempts charter flights from countries wishing to evacuate their citizens. 
“We do not want flights just landing at Jomo Kenyatta International Airport. Whoever is coming should give us a 72-hour notice at the very least,” said Macharia. 
The requirement for notice before planes are allowed in Kenya was not there initially. 
The suspension also exempts cargo flights, which Macharia said can land provided they have no passengers on board. 
The provision on cargo flights, he said, was key due to shortage and need for medical supplies. 
“We are keen to import and supply medical equipment. In fact, we are already planning for a Kenya Airways flight to China on Wednesday to collect some key medical equipment,” the CS said. 
Macharia, who spoke during the daily briefing on the coronavirus pandemic, lamented that some of the directives issued to operators in the transport sector were being ignored.
This is primarily by matatus, which were instructed to carry less than their vehicles’ passenger capacity to ensure one metre social distance. 
Matatus are under instructions to ensure high standards of hygiene by providing hand sanitisers or handwashing points. 
“From tomorrow (April 6, 2020), any matatu not observing the directives will have their Sacco licenses suspended and the operators charged in a court of law as per the Public Health Act,” said Macharia. 
Motorbikes or boda boda operators must also carry one passenger at a time and wear face masks at all times failure to which they too will be charged in court and their bikes impounded. 
The measures came after prediction that cases in Kenya may hit 1,000 this week, 5,000 mid this month and 10,000 by April 30.
Globally, the number of infections stand at 1.2 million across 183 countries with 65,884 deaths. 
Ministry of Health Chief Administrative Secretary Mercy Mwangangi said so far, 3,836 samples have been tested. 
Between Saturday and Sunday, 530 samples were tested of which 16 turned positive; among them 15 Kenyans and a Nigerian. 
Nairobi registered the most cases, at 12, followed by Mombasa with three and one in Kilifi. The counties have been singled out by the Ministry of Health as high-risk. 
Of the 16, nine are from a batch of 2,050 people who were put under mandatory quarantine by the government. This was upon their arrival from overseas before the suspension of international flights on March 25.
“This is a testimony that mandatory quarantine is aimed at protecting the country,” said Dr Mwangangi.
The rest are from contact tracing of persons who had at one point come into contact with earlier cases. 
Some 11 of the 16 had travel history while five are local transmissions. 
The mandatory quarantine requirement, extended by another 14 days, has already been opposed by some of the those being held. 
However, Mwangangi said mandatory quarantine was necessary. “These are painful decisions that we have to take,” she said.
Ministry of Health’s Acting Director General Patrick Amoth said the ministry will not go back on its word to enforce the mandatory quarantine.
“Up to 55 per cent of the cases that have turned positive are from those held in mandatory quarantine. We will not waiver on the extension just to please some people while others are following the set directives,” said Dr Amoth.

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Cotu okays sacking of 50,000 farm workers : The Standard

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A worker at Maridadi flower farm in Naivasha collects ready roses for dumping in a compost yard due to lack of market. [Antony Gitonga, Standard]

The process of declaring thousands of horticulture workers redundant due to the current crisis caused by Covid-19 has started.

The Agricultural Employers Association (AEA) and Central Organisation of Trade Unions (Cotu) in a joint exercise, will send an estimated 50,000 workers home without salaries, as the number of those affected by the pandemic globally continues to rise.
Flower farm workers will be the most affected after the total collapse of the sector that employs more than 150,000 workers directly.
The collapse of the Dutch auction, which accounted for 70 per cent of flower exports, and the lockdown in Europe has played a major part in the current crisis.

SEE ALSO: Japan cruise ship coronavirus cases climb to 174

According to the AEA boss Wesley Siele, they had a meeting with Cotu in which it was agreed that the workers would be sent home due to the current crisis.
He noted that already, seven farms had indefinitely suspended their operations and sent all their workers home.
“We have signed an agreement with Cotu to send an estimated 50,000 workers home without salaries as we continue to monitor the situation,” he said.

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Siele noted that since the country recorded the first case leading to flight cancellations, the sector has lost Sh8 billion, with the figures rising by the day.
“Some farmers involved in export of fresh produce are still in operation despite a challenge in high freight charges but those involved in flower growing face a total shutdown,” he said.

SEE ALSO: New China virus cases drop for third day as toll passes 1,600

He called on the government to support farmers involved in production of fresh produce by zero-rating farm inputs like fertilisers and chemicals.
Food security
“We need to address the issue of food security in the coming months by supporting farmers at this planting season as failure to do so will lead to food shortage in the future,” he said.
Siele expressed the association’s concern that two weeks after the president ordered for VAT refunds, the directive had not been effected.
On his part, Kenya Export, Floriculture, Horticulture and Allied Workers Union Secretary General David Omulama called for support to hundreds of the affected workers.

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SEE ALSO: China leader Xi Jinping knew about coronavirus scale much earlier than believed

Mr Omulama noted that in Naivasha, all the over 50 flower farms had sent nearly all their staff home, meaning an economic crisis for the lakeside town and families.


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Covid-19horticultureAgricultural Employers AssociationFlower farm workers

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