Coronavirus: Inside lawyers' plan to save the economy

Friday March 27 2020

LSK outgoing President Allen Gichuhi at a past event. PHOTO | FILE | NATION MEDIA GROUP


The Law Society of Kenya (LSK) has proposed a raft of measures that it wants implemented by the National Treasury to help the country mitigate against effects of Coronavirus on the economy.

The World Health Organization (WHO) has categorised the severe acute respiratory syndrome Coronavirus 2 (Covid-19) as a pandemic and the Kenyan government has since announced bold measures to contain its spread in the country.

The measures LSK wants considered by government are intended to benefit individuals and businesses who are hard it by effects of Covid-19 in the country.


LSK wants the State to provide incentives to manufacturers of essential supplies such as sanitisers, toiletries, masks, gloves, vitamins and specialised medical equipment by temporarily lowering the applicable corporation tax for the current year of income.

It also want lower taxes on donations made to the Kenya Red Cross, County Governments or any other institution responsible for the management of national disasters.


The lawyers' umbrella body is equally concerned that low income Kenyans will be hit hardest by the economic turmoil caused by the effects of the pandemic.

“To cushion these employees from the negative economic impact of the pandemic, we propose a temporary waiver on Pay as You Earn (PAYE) on low income employees earning Sh23,885 and below per month until Covid-19 is brought under control,” said outgoing LSK President Allen Gichuhi in a statement.

LSK also wants the mortgage relief increased from the current Sh300,000 per annum to Sh500,000 to provide relief to borrowers whose liquidity is likely to be affected during the current year of income.

In order to accommodate the potential challenges by taxpayers to make payments within statutory time limits, LSK proposes a 90-day extension period for payment of the taxes.

“This is bearing in mind that April is the first quarter of the financial year for most taxpayers and the due date for the payment of the first instalment corporate tax and the balance of the corporate tax liability for the previous financial year,” Mr Gichuhi.


With the suspension of travel for all persons coming into Kenya from any country that has reported Covid-19 cases and the ban of all conferences, meetings and public gatherings, it is imperative that hotels and restaurants will scale down their operations or close until the disease is brought under control.

LSK thus wants the government to grant tax rebates and waivers to operators in the hospitality industry to cushion them against losses.

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