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Payslips Deductions Cross Two Third Mark On Increased Taxes.

 

Payslips Deductions Cross Two Third Mark On Increased Taxes.

 

 

  • FKE executive director Jacqueline Mugo lamented that besides the new housing levy, other deductions, such as loans, reduced income taken home by employees
  • According to the new housing tax, employees are deducted 1.5% of their gross monthly income to fund the affordable housing programme, as the employer matches the same contribution
  • Even as FKE decried increased taxes, the Kenya Revenue Authority (KRA) deployed over 1,400 officers with paramilitary training to the field and markets to facilitate tax compliance 
  • The Federation of Kenyan Employers (FKE) has decried the increased taxes imposed by the government.
    FKE executive director Jacqueline Mugo during a meeting with Labour CS Florence Bore.
    FKE executive director Jacqueline Mugo decried increased taxes. Photo: Florence Bore. Source: Twitter

    What did FKE say on taxes?

    FKE executive director and chief executive officer (CEO) Jacqueline Mugo revealed deductions on workers’ payslips had crossed the two-third mark against the Employment Act, 2007.

    Mugo lamented that besides the new housing levy, increased NSSF contributions and other deductions, such as loans, reduced income taken home by employees.

  • There has been quite an increase in the level of breach with what the Employment Act requires. It is a big problem, and we have had engagements with the government. Besides statutory deductions, people have commitments like loans, mortgages, and fees,” Business Daily quoted Mugo.

    According to the Employment Act, 2007, deductions on employees’ salaries shall not exceed two-thirds.

    How much housing levy is deducted?

    According to the new housing tax, employees are deducted 1.5% of their gross monthly income to fund the affordable housing programme, as the employer matches the same contribution.

    However, the total amount contributed by the employee and their employer cannot exceed KSh 5,000.

    The government backdated the housing tax to July 1 after the Court of Appeal lifted the suspension of the Finance Act 2023.

    Why KRA deployed revenue service assistants

    Even as FKE decried increased taxes, the Kenya Revenue Authority (KRA) deployed over 1,400 officers with paramilitary training to the field and markets to facilitate tax compliance.

    The officers completed a two-month training course at the Recruits Training College in Eldoret and qualified as revenue service assistants.

    In a notice, KRA said revenue service assistants would register businesses online and verify taxpayers’ details.

    “Feel free to approach them, say hello, and let them know how they can assist you,” the taxman stated.

    KRA hopes to collect KSh 2.7 trillion in tax revenue in the 2023/2024 financial year after the implementation of the Finance Act 2023, which introduced a raft of taxes.

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