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Breaking News: Pain as more taxes await retirees and low-income earners in Kenya, by News Pro Media Team

Breaking News: Pain as more taxes await retirees and low-income earners in Kenya, by News Pro Media Team
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Breaking News: Pain as more taxes await retirees and low-income earners in Kenya, by News Pro Media Team

The majority of the Kenyan workers may find themselves between a rock and a hard place if the Finance Bill 2020 under the Pay As You Earn section goes through.

According to KMPG analysis bonuses and overtime paid to low-income earners in Kenya may be subjected to taxation.

Income from retirement benefits is also likely to be affected if the bill goes through.

The Financial Bill 2020 proposes that the paragraph exempting taxation of bonuses, overtime, and retirement benefits be deleted.

This amendment aims at taxing the bonuses, overtime, and retirement benefits that had been exempted through the Finance Act 2016.

The bill proposes the expansion of PAYE bands by Tax laws to accommodate bonuses and overtime allowances paid to low-income employees.

Go Slow

KPMG has consequently called upon the government to go slow on executing the changes to cushion low-income employees in Kenya against the devastating effects of the coronavirus pandemic.

The Finance Bill was tabled before the National Assembly for debate on May 6, 2020. This is a new phenomenon since initially all financial bills would be introduced to the National Assembly after the reading of the National budget in June.

The change was propelled by recent court procedures preventing the Government from collecting taxes before relevant provisions are approved by the National Assembly.

 

 

 

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