- Mukhwaya said they are concerned that the average public sector worker is already over-taxed.
- The proposal includes a 15 percent withholding tax on payments related to the monetization of digital content
Police in Nairobi say they will provide security for public servants who plan to stage a protest against the planned increase in taxes on Monday, May 29.
The group consisting of leading trade unions plans to petition Parliament to reject proposals to increase taxes.
Officials said the public service sector union's peaceful procession is set to start from the University of Nairobi’s Chancellor's Court and march through various streets up to Parliament Buildings.
Nairobi police boss Adamson Bungei said they are aware of the protests.
“It is their right and we will be there to ensure it is peaceful,” he said.
Kenya National Union of Teachers (KNUT), Kenya Universities Staff Union (KUSU), Universities Academic Staff Union (UASU), Kenya Medical Practitioners and Dentist Union, Union of Kenya Civil Servants, Kenya Health Professionals Society and Kenya Union Of Domestic Hotels Educational Institutions Hospitals and Allied Workers (Kudheiha) among other public union members will march to the National assembly in protest against what they termed as over taxation.
This comes amid ongoing debate on a new housing levy among others, which has attracted divided opinion.
The levy seeks to tax three per cent of workers' monthly basic salary to fund President William Ruto's affordable housing project.
They said they are concerned that a decision of such magnitude is being made without any engagement with workers as stakeholders and is in total violation of Section 26(2) of the Employment Act, 2007.
“As unions, we condemn in the strongest terms the heartless, insensitive, and cavalier manner in which the government is proposing to impose a housing levy without any commensurate increment in workers' payments. We demand the immediate reversal of the levy,” KUSU Secretary General Charles Mukhwaya said.
He said as stakeholders in the labour movement they will soon decide on the way forward on the continuous government’s insensitivity to the plight of workers, especially in the public service.
Mukhwaya said they are concerned that the average public sector worker is already over-taxed.
“We are urging Parliament to reject the proposed amendments 2023, we are also urging the government to reduce taxes imposed on workers and we call upon the government to immediately engage representatives of workers unions to agree on the best way forward,” he said.
Mukhwaya said the Kenyan economy is facing many challenges, including soaring inflation and a high cost of living, which, the government is yet to tackle them.
“The Finance Bill 2023, if passed the way it is, will see total deductions of up to 22 percent of one’s monthly earnings, with the remaining 48 percent still subjected to 16 percent VAT of all goods and services bought, whose prices are ever increasing. The rising cost of living makes a public service employee a slave who cannot afford a decent life,” he said.
COTU Secretary General Francis Atwoli has advised the government to be cautious in its approach to tax hikes, stating that they can be counterproductive.
The Treasury submitted the Finance Bill 2023 to the Parliament, proposing changes to the Employment Act.
Treasury CS Njuguna Ndung’u has, however, capped the proposed deductions, which will be matched by employers, at Sh5,000 in what is largely a reintroduction of a policy rejected during retired President Uhuru Kenyatta’s administration.
The Finance Bill 2023 also proposes a raft of taxes that will have a major impact on Kenya’s digital content creators and owners of platforms that facilitate the trading of digital assets.
The proposal includes a 15 percent withholding tax on payments related to the monetization of digital content, which will significantly impact the thousands of young people who make their living in the digital space.
Also, any person who receives rental income on behalf of the owner of the premises shall deduct tax and within 24 hours remit the amount to the taxman.
The Finance Bill 2023 is also seeking to introduce a tax on human hair, eyelashes, switches, and artificial nails in a move that will raise the prices of these beauty products whose usage is on the rise.
Proposed new taxes introduced include Sh100,000 per metric tonne of imported fish or 20 percent of the value, whichever is higher.
Powdered juice will be taxed at Sh25 per kilogramme while sugar, excluding that imported or locally purchased by a registered pharmaceutical manufacturer, will attract a Sh5 tax per kilogramme.