Accountants want the government to give tax concessions to companies and individuals to ease the burden brought on by the coronavirus pandemic.
The Institute of Certified Public Accountants of Kenya (ICPAK) yesterday called for the deferment of taxes and loan repayments to financial institutions to boost the economy.Among its key proposals, ICPAK wants the payment of corporate tax return balances for 2019 that are due by April 30 be deferred for three months to July 30. Tax balances for businesses with other accounting periods should also be similarly deferred, said ICPAK.
It also asked for the immediate payment of pending value added tax (VAT) refunds. “All pending unpaid income tax and VAT refunds be immediately paid without any further delays by Kenya Revenue Authority, especially for repeat claimants who have low risk profile of defaulting,” said ICPAK in a press statement.To support workers, the accountants’ lobby proposed that all employees who are directly employed and are laid off be offered a guaranteed loan credit equivalent to three months’ pay, to be repaid and recovered by the employer through a check-off system.
A tax rebate of 50 per cent on payroll taxes paid by small businesses should also be ensured, the institute said.
Further, the accountants recommended that Pay as You Earn (PAYE) tax be due on actual salaries paid, and not on accrued salaries.
ICPAK said the measures, which it called “stimulus options” for Kenya, will cushion the economy, saving businesses and households as the Covid-19 onslaught continues.
The pandemic has shut down businesses and threatens to cripple the global economy.Travel restrictions have seen the grounding of planes, and led to pay cuts and laying off of airline staff.
Tourism and hospitality sectors have also suffered, while farmers who export their produce are in limbo as countries shut down borders. Manufacturers who depend on industrial supplies from abroad are also hard hit.
Many other sectors are reeling from the slowdown in business activity. The government has taken some measures to soften the pain of the pandemic, including scrapping some bank and mobile money transfer fees, lowering the Central Bank Rate to ease the costs of borrowing, and boosting access to faster Internet to support working from home.
But ICPAK feels more can be done. To support of micro, small and medium firms, for instance, it proposed a suspension of loan payments for three months or until Covid-19 is contained.
“Borrowers with payment suspensions should not accrue any interest or fees during the payment suspension period and should be provided with affordable options to repay arrears,” it said.