The times are hard for many Kenyans but Senate has just proposed radical measures to cushion people who are hardest-hit by the Covid-19 pandemic.
The proposal seeks to have the most affected exempted from paying rent, utilities charges, servicing loans, salary cuts, land rates and trading licences.
These radical proposals are contained the Pandemic Response and Management Bill, 2020, which is sponsored by Nairobi Senator Johnson Sakaja.
“The Bill seeks to provide measures to mitigate against the effects of the pandemic and provide a mechanism to cushion those that may be adversely affected,” reads the bill.
Should it sail through the Senate, the Treasury will, with the approval of Parliament, introduce the radical measures to cushion the affected people for the period of the pandemic.
On Tuesday, the National Assembly endorsed the reduction of value added tax (VAT) from 16 to 14 percent as proposed by President Uhuru Kenyatta.
The senator, who is the chairman of the Senate Ad Hoc Committee on Covid-19, says the aims to provide effective response to and management of a pandemic despite misgivings on the impact on the common man.
“Treasury erred by reducing taxes. In an economy where prices of commodities are liberalised you cannot control prices, the common man will not feel it as Treasury will have to make increments elsewhere to cover the gap,” said Kipipiri MP Amos Kimunya.
“This is a populist move by Treasury which is not sustainable. For instance, they are now introducing VAT on agricultural products to cover the lost amount in VAT,” Kimunya, a former Finance minister, added.
Homa Bay MP Peter Kaluma said the situation will require the government to have a lot of money to reduce VAT and expect things to remain the same.
“Reduction of VAT without corresponding measures will not help, it will instead make things worse,” said Kaluma.
Sakaja’s Senate Bill seeks to have tenants give a notice in writing to their landlords or contracting party that they are unable pay rent because of the coronavirus pandemic.
Reads the draft: “Upon receipt of a notice, the contracting parties shall enter into an agreement on how the tenant shall meet their obligation at the end of the pandemic.”
The Cabinet Secretary in charge of Housing, will provide measures to cushion landlords and tenants during the period under review.
In situations where those affected are incapable of servicing their loans and mortgages because of the pandemic, borrowers shall notify and enter into an agreement with the lending institution on how to make the payments after the pandemic.
Sakaja wants borrowers saved from the burden of paying penalties and the Credit Reference Bureau (CRB) will not list those who default during the period.
“Lenders shall not charge fees, interest or any other penalty for non-payment or late payment of obligations during the pandemic period,” it states.
And where a contract was entered into before the declaration of a pandemic and the pandemic affects the performance of a contractual obligation, commencement of levying of execution, enforcement of security over movable and immovable property used for the purpose of a trade, business or profession, repossession of any goods used for the purpose of a trade, business or profession or termination of lease or license shall be prohibited.
