The National Assembly has proposed amendments to the following statutory provisions in order to cushion Kenyans from the economic effects of the Covid-19 pandemic:
| Statutory Provisions | Amendments |
|---|---|
| The Law of Contract Act, Cap 23 | Inserted Section 3A to construe the Covid-19 pandemic as an event of force majeure. This means that a failure to perform the terms of a contract that were entered into prior to the occurrence of the Covid-19 pandemic, will not be deemed to be a breach of contract. Specifically, the Amendment prohibits the enforcement of any security right over movable and immovable property; the repossession of goods used for the purpose of trade, business or profession; the commencement of levying of execution; and the termination of a lease or licence over immovable property in connection with the non-payment of rent or other monies. |
| The Banking Act, Cap 488 | Section 31 amended through the insertion of subsections 5A and B to protect persons who are unable to service their loans from being listed as loan defaulters on the Credit Reference Bureau (CRB). It is now an offence to share any credit information with a CRB during this period. |
| Inserted Section 33D that requires financial institutions to restructure loan repayment plans in order to allow for alternative repayment methods, including deferred payments where a borrower is unable to perform its obligations under an existing contract. This amendment is meant to protect Kenyans from any penalties that would have been imposed by banks due to a failure to repay their bank loans. | |
| Inserted section 56A which dictates that no bank or financial institution shall charge fees/interest or impose any penalties in case of default by the borrower during the pendency of COVID-19. The parties shall enter into a restructured arrangement for loan repayment should the pandemic adversely affect the borrower’s ability to pay for a period they shall agree upon. | |
| Employment Act, 2007 | Inserted Section 94 to protect employees from possible job losses and coerced salary pay cuts. The Amendment allows employers who are unable to meet their obligations to pay salaries to permit employees to take unpaid leave during the duration of the Covid-19 pandemic. |
| First Schedule of the Value Added Tax Act, 2013 | Inserted Section 96A to exempt Personal Protective Equipment (PPEs) from VAT. This will see a reduction in the costs of PPEs for use by the public. |
| Retirement Benefits Act, 1997 | Inserted Section 38 (1A) to the schedule to the Act to enable Kenyans enrolled in Retirements Benefits Schemes to use a percentage of their funds to purchase residential homes. |
The Notice from the National Assembly may be accessed here.
We shall keep you updated on any further developments.
Please contact us at info@cfllegal.com should you require more information.
