Tuesday July 14, 2020 – Kenya is expected to save almost Ksh30 billion due to the restrictions imposed to control the spread of Coronavirus.
According to the latest report by the World Bank, the country will save up to Ksh30 billion by June 2021.
A huge chunk of these savings is attributed to the reduction in civil servants’ foreign and domestic travel.
Government officials earn very hefty bonuses and allowances associated with meetings and travels.
The Government also halted meetings and trainings, which is expected to reduce expenditure in terms of mileage, sitting and subsistence allowances.
Kenya’s civil service employs over 700,000 Kenyans and is a favourite when it comes to job searches due to the perks.
In many cases, Government employees earn double their salaries in form of allowances which are not taxed.
According to Kenyan tax laws, amounts that are mere reimbursement of expenses, for example, subsistence allowance on official duty (per diems) or mileage allowances are not considered taxable pay.
Per diems of up to Ksh 2,000 per day are tax-free.
However, the Ksh30 billion savings have been overshadowed by the cost the virus has had on the country’s economy and fiscal position.
According to the government, Kenya has lost over Ksh100 billion in revenue, Ksh80 billion having been lost in the tourism and hospitality industry alone.
Other than the loss, the Government is expected to incur over Ksh100 billion in its plan to mitigate the impact of the virus and spur economic growth.
The Kenyan DAILY POST