The Kenya Kwanza government has raided employers' and employees' pockets in its first year and seems not to be stopping.
After a court battle of close to 10 years, the Court of Appeal allowed revised National Social Security Fund contributions which took effect in February, boosting Ruto's push for higher retirement savings to at least 25 per cent, up from the current 12 per cent.
This saw monthly matching contributions by both employees and employers rise from the current Sh400 to 12 per cent of a worker’s monthly pensionable income, with a maximum contribution of Sh2,160 for workers earning more than Sh18,000 per month.
The Finance Act, 2023 saw the introduction of a housing levy and raised Pay-As-You-Earn for those earning above Sh500,000. The government is now planning to raise NHIF contributions to 2.75 per cent for salaried people.
Although these measures, if followed through will see the country cut on debt dependency and yield in quality public services, they might increase the burden on employers and decrease the spending power of employees.
Coupled with the six-month stream of contraction in the country's Purchasing Managers Index (PMI), this could lead more employers to make decisions on layoffs and restructuring.
The tax revenue to GDP ratio in Kenya of less than 18 per cent is lower than the OECD average of around 34 per cent. This is due to, inter alia informal workers being five times higher than formal.
The idea of overburdening these formal workers, rather than solely focusing on boosting trade and investment, could lead to higher informality.
Moreover, employers may consider shifting staff to contract workers and consultants. Higher payroll deductions are also negative to motivation.
The pressure on President William Ruto to restore confidence in creditors, as well as achieving the immense task of realising his campaign manifesto during a period of fiscal consolidation, has led to a tendency towards making unpopular decisions.
Failure to yield fruits could result in souring sentiment among swathes of the voting population.