Obey your thirst! Uhuru opens pubs, extends tax reliefs

Kenya Medical Practitioners and Dentists Council Chair Eva Njenga (right) with Isiolo Governor Mohammed Kuti, during the national Covid-19 conference at the KICC, Nairobi yesterday. [David Njaaga, Standard]

President Uhuru Kenyatta has sanctioned the opening of pubs and nightclubs after a six-month period of shut-down.

The President also extended most of the tax relief measures aimed at cushioning individuals and businesses distressed by the Covid-19 crisis to the beginning of next year.

And to help businesses recover some lost revenue, Uhuru directed Treasury to extend the reduction of value-added tax levied on every sale made to January 2021.

He spoke at the National Covid-19 conference in Nairobi, which was called to take stock of Kenya’s journey battling the pandemic. “The prohibition against the operation of bars and prohibition against sale of alcoholic drinks and beverages by ordinary restaurants and eateries shall stand vacated with effect from September 29, 2020,” said the President.

Other tax relief measures, including a reduction of pay as you earn (PAYE) to 25 per cent on those who earn more than Sh24,000 and 100 per cent tax waiver on those taking home less than Sh24,000, will end in January next year.

Turnover tax, which had been reduced from 3 per cent to 1 per cent, will run its course by end of December.

Uhuru also ordered the Exchequer to quickly roll out the credit guarantee scheme aimed at helping small businesses distressed by the pandemic to access cheap loans from financial institutions.

Treasury CS Ukur Yatani said they would in the “next few weeks” roll out the credit guarantee scheme, which will see the government pay for part of the loan that will be taken by micro, small and medium enterprises. “The credit guarantee scheme, as approved by Cabinet, is a risk-sharing partnership between government and banks, which will afford our enterprises access to credit by an additional Sh100 billion,” Uhuru said.

He extended the curfew by another 60 days but pushed it up to between 11pm and 4am starting Today. This will also help bars, which can now operate till 10pm.

The closure of bars and nightclubs has not only hurt proprietors and people that depend on them like entertainers, it has also hurt government income, with the taxman losing Sh16.8 billion in excise taxes (sin taxes) on products like beer, cigarettes and spirits.

However, the end of the tax relief measures might be too soon for an economy that experts say will take long to recover from the shocks of the pandemic. Most experts do not expect the economy to grow by more than 3 per cent this year. However, most of them expect the economy to recover next year, as the crippling effects of the pandemic die out.

The containment measures that were instituted to curb the spread of the virus has had adverse effects on livelihoods, with close to 1.7 million people losing jobs between April and June.

April, when the country first instituted the measures, was one of the worst periods, with almost all the leading economic indicators such as activities at the Nairobi Securities Exchange, electricity sales, mobile money payments, and exports, declining.

Yesterday another 53 people tested positive, pushing the total number of cases to 38,168.

Uhuru announced that plans to reopen schools in October had been shelved. He said the State could, at the moment, not guarantee that learners would not be exposed to the virus in the learning intuitions.

This comes as teachers return to their workstations today as ordered by Education CS George Magoha.

The paramount consideration, he said, was the safety and well being of the children and the State could, at the moment, not guarantee that the learners would be safe from the coronavirus while in school.?

“The lives of our children and their health is not a matter for debate. Learning institutions therefore should only be reopened when we can sufficiently guarantee the safety of all our children. Let us not focus ourselves on when schools will reopen but how schools will be opened in a manner that protects their lives and health,” said Uhuru.

He said the resumption of in-person learning must be predicated on strict adherence to health protocols and guidelines. “Therefore, I call upon the CS for Education that once we have agreed on the how, he will issue a calendar for the resumption of the 2020 calendar if it is to be or if it is going to be 2021,” he added.

The war analogies that the President has used in his previous addresses were replaced with that of a ship charting a course.

The country, he said, had navigated the turns and twists of the coronavirus crisis for the last six months, and was within sight of safe harbour. “I’m confident that we will stay the course for the remainder of this journey and reach our desired end,” he said, warning: “I will not hesitate to escalate containment measures in the event any of these indicators registers on my dashboard.”

Uhuru raised the maximum number of guests at funerals and weddings from 100 to 200, while churches can now host a third of their capacity.

He said the Covid-19 positivity rate had fallen from 13 per cent in June, 7 per cent in August and is now at 4.4 per cent in September. “With these figures, we can be tempted to celebrate, more so because we are now below the 5 per cent positivity rate recommended by the World Health Organisation for reopening,” he said.