(5 minutes read)
· I&M Holdings of Kenya has reported a drop in profit after tax – 29.7 percent- to Sh1.7 billion in the first quarter of the 2020 financial year. The drop is mainly due to a 178.4 percent year on year increase in Loan Loss Provisions, which was pegged at Sh0.6 Billion. Non-interest revenue grew 3.3 percent to Sh2.1 Billion, while Net Interest Income grew 4.6 percent to Sh3.5 Billion. Its operating income was Sh5.6 billion as operating expenses before provisions rose 6.9 percent to Sh2.4 Billion.
· An estimated 300,000 people in Kenya have lost their jobs due to the pandemic. According to the government data, the job losses were reported since March. The worst is that the job losses have led to deprivation of close to three million livelihoods in the country. Each person who lost the job was supporting close to 10 people. There are also several other strain points the society has to put up with such as people’s inability to pay rent, increased gender-based and domestic violence etc. A month back President Uhuru Kenyatta also warned about losing a half a million jobs in the next six months.
· Local hotel chain in Kenya, PrideInn –is preparing to re-open their hotels in Nairobi and Mombasa to the local guests. Recently, the government outlined an economic stimulus program to revive the economy affected by the pandemic. The hotel group is working with other key hospitality stakeholders to come up with new operating measures, which are in compliance with the health ministry’s guidelines. Happily, several hotels in the country have used the lull of the Covid-19 for renovating their properties. Victor Shitakha, Chairman Kenya Coast Tourism Association said that hoteliers are taking extraordinary measures to make guests feel comfortable coming back to hotels and developing local attractions.
· The Kenya Revenue Authority will be paying Sh.10 billion in Value Added Tax refunds following a presidential directive and release of funds by the National Treasury. The exercise is expected to be finalized in a week’s time. The refunds are financial relief measures to businesses hit by the COVID-19 pandemic especially the horticulture, transport and hospitality sectors of the economy.
· On March 25, President Uhuru Kenyatta told the National Treasury to effect an immediate reduction of the VAT from 16 percent to 14 percent which took effect on April 1st this year. The Kenya Revenue Authority was also told to expedite the payment of all verified VAT refund claims amounting to 10 Billion shillings and allow for offsetting of withholding VAT, in order to improve cash flows for businesses. Kenyatta also ordered for a hundred percent tax relief for persons earning gross monthly income of up to Sh24, 000 to cushion Kenyans against the impact of the coronavirus pandemic. Other tax incentives included reduction of residential income tax from 30% to 25% and reduction in turnover tax from 3% to 1%, which will greatly help micro, small and medium companies.
· Kenya’s overall year on year inflation rate in May came down to 5.47 percent from the revised 5.62 percent recorded in April, according to the government data released by the Kenya National Bureau of Statistics. However, the consumer price index (CPI) increased by 0.63 percent from 107.92 in April 2020 to 108.60 in May 2020. Food and non-alcoholics scaled by 0.86 percent between April and May. The year on year food inflation in May 2020 stood at 10.55 percent. Indices of housing, water, electricity, gas and other fuels increased by 0.84. Two items -onions and carrots- recorded the highest percentage increase of 4.51 and 3.32 respectively. Price indices for oranges, spinach and Sukuma wiki recorded 3.32, 2.57 and 2.24 percent increase each. Prices of some food items, such as avocado, potatoes and tomatoes declined by 4.50, 3.58 and 3.0 percent.
