Prepare for higher monthly income tax and increase in food and fuel prices in 2021 as the Covid-19 relief comes to an end next month.

National Treasury Cabinet Secretary Ukur Yatani announced the monthly Pay-As-You-Earn (Paye) deducted from salaried employees will revert to 30 per cent from 25 per cent in January.

The government reduced Paye to cushion millions of workers from the economic effects of the coronavirus pandemic.

Value Added Tax (VAT) will also be reverted to 16 per cent from the current 14 per cent, meaning the prices of fuel, food, drugs and other basic commodities will shoot up.

Companies will also go back to paying corporate tax at the rate of 30 per cent from the current 25.

CS Yatani said the measures are intended to increase the country’s revenue.

Also to be scrapped is the provision that saw those earning less than 24,000 exempted from taxes.

The CS added that the government will decide in January on whether to join the controversial International Monetary Fund (IMF) support programme.