All Civil Servants’ Payslips Set to Diminish As More New Taxes Get Injected
All Civil Servants’ Payslips Set to Diminish As More New Taxes Get Injected. Kenyans must tighten their rights after the Court of Appeal overturned a ruling that blocked the implementation of the 2023 Finance Act.
The Kenya Revenue Authority (KRA) has announced plans to roll back the new taxes set out in the Finance Act retroactively to make up for the period when the Finance Act was still pending in the Court of Appeal.
“Officers are hereby notified that the provisions of this Act shall come into force on the dates specified in Section 1 of the Act and on January 1, 2024,” the KRA notice reads in part.
High income
Unlike the Employment Act of 2007, which prohibits employers from deducting more than two-thirds of a worker’s base salary, the law’s tax exemption allows employees to deduct less than one-third of their gross salary. take care
All Civil Servants’ Payslips Set to Diminish As More New Taxes Get Injected
One of the taxes introduced in the controversial employee finance law is that workers earning more than 500,000 shillings a month will be taxed at 32.5%.
Similarly, employees earning more than 800,000 shillings will receive a monthly deduction of 35%.
The purpose of increasing taxes is to increase tax revenues in order to facilitate the implementation of the budget.
Housing tax
There is also another deduction from the National Housing Fund which requires employees to contribute 1.5% of their basic salary. Employers are also required to contribute equally.
The government has also increased contributions to the National Social Security Fund (NSSF) from 200 shillings a month to 6 percent of workers’ wages, who are expected to contribute 1,080 shillings to the fund.
Employees must also contribute to the National Health Insurance Fund (NHIF), which the government has proposed to increase by 2.75% from the previous 1,500 shillings.
With this deduction, many employers are reluctant to raise their employees’ salaries because the tax will also affect their employees.
As a result, some companies have sent out notices of possible layoffs, and some are holding their breath, not knowing when they will be suspended.
All Civil Servants’ Payslips Set to Diminish As More New Taxes Get Injected