This archive report was first published on 25 August 2020.
On August 25, 2020, the Kenya Revenue Authority (KRA) released statistics showing a dismal performance in taxes on income by individuals.
The Pay As You Earn (PAYE) taxes rose a mere two percent to Sh401.31 billion in the period, signaling an environment of job cuts, hiring freezes, and a pause on pay increases, exacerbated by global coronavirus shocks.
According to KRA Commissioner-General Githii Mburu, the slow growth was driven by a decline in the employment rate in the fourth quarter, mainly due to measures taken by private firms to reduce operating costs.
As a result of the Covid-19 containment measures, companies scaled down operating hours, hitting their sales and resulting in reduced earnings for homes and businesses.
Companies responded by cutting their workforce, slashing salaries, and adopting unpaid leave policies, further deepening the drop in tax receipts.
The situation was worsened by tax reliefs offered by Treasury Secretary Ukur Yatani from April to cushion businesses and workers from the economic shocks of the Covid-19 pandemic.
Statistics released by the Kenya National Bureau of Statistics showed that some 287,481 Kenyans lost their jobs in the first three months of the year, with the situation worsening from April due to partial trade lockdowns and travel restrictions.
