Kenya: MPs to Hold Special Sitting on COVID-19 Tax Breaks Next Week

National Assembly Speaker Justin Muturi is expected to gazette special sittings of the National Assembly on April 8 to consider economic stimulus interventions that President Uhuru Kenyatta announced last week in response to the coronavirus pandemic.

This follows a petition from National Assembly Leader of Majority Aden Duale who has listed a number of urgent matters that he wants the House to consider in implementing the President's directive.

According to Mr Duale, the legislators are expected to consider all the stages of the Tax Laws (Amendment) Bill, 2020 containing part of the legislative measures to address taxation regime due to the Covid-19 disease in the country.

The MPs will also consider any other legislative measures to cushion the country from the effects of the pandemic.

The consideration of persons nominated for the appointment to various constituency committees of the National Government-Constituency Development Fund (NG-CDF) Board and the approval of appointment of persons to the Teachers Service Commission (TSC) are also on the in-tray for the legislators.

"Pursuant to the provisions of Standing Order 29, I wish to request you to call for special sittings of the House on Wednesday, April 8, 2020," Mr Duale says of the special sittings to take place in the National Assembly's debating chamber from 10am.

The National Assembly holds two sittings every Wednesday -- one in the morning and the other in the afternoon.

"Whenever during a session the House stands adjourned, whether or not a day has been appointed for the next meeting, the Speaker may, on the request of the Leader of the Majority party or the Leader of the Minority party, appoint a day for a special sitting of the House," the Standing Order states.

However, the Speaker may allow the request if he is satisfied that the business proposed to be transacted relates to urgent and exceptional business.

The Standing Order further notes that once satisfied with the weighty of the petition, the Speaker shall, by notice in the gazette, notify the Members of the place, date and time appointed for the special sitting of the House.

Last week, National Treasury Cabinet Secretary Ukur Yattani published a gazette notice reducing Value Added Tax (VAT) from 16 percent to 14 percent, just a day after President Uhuru Kenyatta directed so.

The president directed that the order should come into effect on April 1.

Section 6 (1) of the Value Added Tax (VAT) Act provides that the Cabinet Secretary in charge of Treasury may amend the rate of tax by order published in the Gazette by increasing or decreasing any of the rates of tax by an amount not exceeding 25 percent of the rate.

The gazetted order must, however, be introduced in the National Assembly in the form of regulations.

"Every order made under subsection (1) shall be laid before the National Assembly without unreasonable delay," reads Section (2) of the VAT Act.

This means that the House Committee on Delegated Legislation chaired by Uasin Gishu Woman Representative Gladys Shollei will have to consider the order that will come to the House in form of regulations and without amendments to it in line with the Statutory Instruments Act of 2013, approve or reject it in a report to be presented to the House.

If the House rejects the order, the VAT shall go back to 16 percent.

"The order shall cease to have effect if a resolution of the National Assembly disapproving the order is passed within 20 days of the day on which the National Assembly next sits after the order is laid, but without prejudice to anything previously done thereunder," the Act says.

The President also directed that the National Treasury implements immediate reliefs and increase disposable income to the people of Kenya, through 100 percent Tax Relief for persons earning gross monthly income of up to Sh24,000.

There is also a reduction of Income Tax Rate (Pay-As-You-Earn) from 30 percent to 25 percent, reduction of Resident Income Tax (Corporation Tax) from 30 percent to 25 percent and reduction of the turnover tax rate from the current 3 percent to 1 percent for all Micro, Small and Medium Enterprises (MSMEs).

Unlike the VAT Act, these changes require substantive amendments to the respective laws.

There was also the appropriation of an additional Sh10 Billion to be approved by the National Assembly.

The appropriation targets 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.

The president also announced that the National Assembly immediately appropriates Sh1 billion from the Universal Health Coverage kitty "strictly" towards the recruitment of additional health workers to support in the management of the spread of Covid-19.

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