Inflation rate for the month of December edged upwards to an 8-month high of 5.62% from 5.33% the previous month.

A rise in the prices of essential food items, transport, electricity, water, gas, and other fuels such as kerosene/paraffin, contributed to a surge in the December cost of living index.

The National Statistical Office’s latest figures show that food inflation had the most significant price increases between November and December 2020, at 2.45%.

With December inflation figures on the rise, there are signs that the month of January could usher in even more tough times for Kenyan households and businesses.

Effective midnight of December 31st, 2020 firms in the digital marketplace will pay a Digital Services Tax at 1.5%. The taxman projects to raise at least KSh 5 Billion from digital services tax, at the end of the financial year ended June 2021.

Household items are set to become costly following a hike in VAT back to 16%. Individual Income tax has also reverted to 30% from 25% while the Pay as You Earn (PAYE) tax band has been lowered to KSh 32,333.

Businesses seeking a permit will have to bear the cost which has risen up by 30%, effective January 1st, 2021.