The Value Added Tax (Amendment of the Rate of Tax) Order, 2020 (“The Order”) was published by the Cabinet Secretary for the National Treasury and Planning on 26^th March 2020.

The Order amends section 5 (2) (b) of the Value Added Tax Act, 2013 which imposes Value Added Tax on the value of taxable goods and services.

The Order was made pursuant to a directive issued by the President on 25^th March 2020 meant to cushion Kenyans against economic effects of the COVID-19 Pandemic.

The Order reduces the rate for Value Added Tax from sixteen per cent (16%) to fourteen per cent (14%).

The reduction of the rate to fourteen per cent (14%) lowers the tax liability for taxable goods and services under the Value Added Tax Act, 2013 by up to 12.5%.

In addition to the Order, the President in his address on 25^th March 2020 directed the Kenya Revenue Authority to expedite the payment of all verified claims for Value Added Tax refunds amounting to Ksh. 10 Billion by 15^th April 2020.

Please note that the Order came into force on 1^st April 2020. However, the order is required to be tabled in the National Assembly for approval.

The Order can be found here.

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