The Treasury is set to release billions of shillings meant to help cushion businesses from the ravaging effects of the Covid-19 pandemic starting Friday.
Treasury Cabinet Secretary Ukur Yattani told the Business Daily that the funds — Sh10 billion in value added tax (VAT) refunds and Sh13 billion to clear the pending bills announced by President Uhuru Kenyatta on March 25 — will start flowing after the procedures for disbursing them were completed Thursday.
“We are starting to release as from tomorrow (today). The budget has been loaded and IFMIS is now starting to process the payments,” Mr Yattani said in response to follow ups on the disbursement of the funds which had delayed beyond the promised timelines.
The President had ordered that the funds be released in three weeks but more than a month later, businesses were yet to receive them.
The disbursements will come as a big relief to businesses facing liquidity constraints caused by slow business during the pandemic.
Kenya Association of Manufacturers (KAM) chairman Sachen Gudka said the funds would provide a major boost for businesses which have been experiencing reduced sales due to the coronavirus.
Mr Gudka called on the government to also start releasing the Sh100 billion in withholding tax that businesses paid the Kenya Revenue Authority and is due for refund after the tax rates were adjusted.
“It will be a welcome relief because everyone needs the money now. We know that it may not be possible to get the Sh100 billion at once but we had asked that we be allowed to offset them against other taxes like Pay As You Earn (PAYE),“ Mr Gudka said.
The KRA had appointed several businesses to be tax withholding agents at six percent before the rate was reduced to two percent, leaving the taxman with more than Sh100 billion owed to them.
The VAT refunds and the pending bills were supposed to have been processed last month to cushion the country against the economic effects of Covid-19.
“All ministries and departments shall cause the payment of at least of Sh13 billion of the verified pending bills, within three weeks from the date hereof. Similarly, and to improve liquidity in the economy and ensure businesses remain afloat by enhancing their cash flows, the private sector is also encouraged to clear all outstanding payments among themselves; within three weeks from the date hereof,” Mr Kenyatta said on March 25.