TEACHERS TO CONTINUE ENJOYING TAX RELIEF AS CS YATANI EXTENDS PERIOD; TEACHERS’ NEWS
Teachers have got a reason to smile besides the much- anticipated July 2020 pay rise after the government extended the tax relief period until the coronavirus ends.
This follows a formal announcement by Treasury Secretary Ukur Yatani about the Government’s plan to extend the tax relief beyond the three months as earlier indicated.
The 5% tax relief that teachers are currently enjoying was meant to last for only three months but now that virus has persisted, the Government decided to extend the period.
This means that teachers and other civil servants earning more than sh 24, 000 a month will continue enjoying the PAYE relief until the virus stops spreading.
In June 2020, CS Yatani told the Parliament that the Government will have to review the tax reliefs once the pandemic is over.
This comes in handy at a time when some financial institutions including the national bank, NBK have decided to increase teachers’ ability to borrow by using the new adjusted PAYE to calculate loan amounts.
Tutors who may be interested in applying for bank loans during the Covid-19 period are likely to reap more from the newly adjusted Pay As You Earn, PAYE.
This, therefore, means that teachers are likely to get more money at their disposal for various developmental projects.
In one of the messages seen by our media team, National Bank informs its clients, teachers about its latest move-taking into account the New Tax Relief in lending.
“I am glad to inform you that we are now considering the New Tax Relief in lending. You, therefore, stand a chance of higher qualifications. For calculations and inquiries please contact 07xxxxxxxx,” reads part of the message sent to teachers who bank with NBK.
Other banks such as ABSA gave teachers a three months’ loan break to cushion them against the biting effects of the coronavirus.
Since the President’s announcement of tax relief for various categories of employees in Kenya, teachers have been enjoying slightly higher salaries that are likely to improve their ability to repay and hence qualify for higher loans.
Teachers’ Pay As You Earn, PAYE was consequently reduced following the President’s directive from 30 to 25 percent.
Employees earning a gross monthly salary of less than Kshs 24, 000, on the other hand, are currently enjoying 100 percent tax relief.
The President also suspended the listing of persons in micro or medium enterprises by the CRB whose loan accounts were in arrears or due effective April 1, 2020.