•For many employed workers, the current levels of taxation drain their incomes leaving them with very little disposable income
•These include the recently introduced the Affordable Housing Levy (AHL) of 1.5 per cent and the proposed 2.75 per cent contribution to the Social Health Insurance Fund
Image: FILE
Each passing day is a struggle for majority of workers in the country, according to a new survey by the Central Organisation of Trade Unions (Cotu)
It says that with the rising cost of living, some workers can barely afford to put food on their table while those who can do so have been forced to cut o their purchases.
This is as per the findings in a report released by the Central Organisation of Trade Unions on Wednesday.
The report titled 'Turning The Tide On Kenya’s Economy: Recovery and Prosperity Through The Workers’ Lenses’ was released on Wednesday
It says that over the past one year, the steady rise in prices of essential commodities such as electricity and fuel has forced workers to reduce the basket of items they can purchase with their income.
The findings reflect those of an Infotrack survey released on Monday in which 70 percent of Kenyans said they couldn’t make ends meet.
According to the finding by Cotu, the current levels of taxation have drained many employed workers leaving them with very little disposable income.
These include the recently introduced the Affordable Housing Levy (AHL) of 1.5 per cent contributed by both the employer and the employee based on gross pay and the 2.75 per cent contribution to the Social Health Insurance Fund.
Of great concern among workers is the persistent unemployment over the last one year as companies close shop in Kenya and opt for neighbouring countries.
This has been occasioned by the high taxation rates introduced by the government in its effort to raise more revenue.
“Unemployment has persisted over the past year and continues to rise with several companies closing shop from Kenya and moving to other neighbouring countries like Tanzania due to increasing cost of doing business as the government imposes more taxes in its attempt to raise revenue,” Cotu Secretary General Francis Atwoli says in the report.
This has led to increased declaration of redundancies with the Federation of employers (FKE) estimating that about 70,000 formal jobs were lost in Kenya between October 2022 and November 2023.
“More job losses are expected as employers contemplate of further downsizing as a coping mechanism with the drastic increasing in operating costs in Kenya,” the report says.
According to the report, workers are of the opinion that corruption draws too much from the economy perhaps more than the annual national budget denying the country so much in tax revenues since proceeds of corruption are not subjected to taxation.
"Workers have been devastated at the breaking news on corruption cases in Kenya that span the era of the founding to the current fathers of the Nation,” the report says.
In February 2023 for example, the European Union warned Kenya of the possibility of being blacklisted by foreign investors because of corruption and money laundering.
This, the report says denies Kenya of the much-needed employment opportunities that come with foreign direct investments since corruption increases costs of doing business in Kenya.
The report raises concern that numerous corruption cases have tainted the country’s public procurement as only individuals who bribe the process get government tenders thereby leading to inefficiencies in the market.
The workers have also expressed concern that the country has continued to sink deep into debt due to over borrowing.
Workers are of the opinion that rampant borrowing by the government especially from the IMF and the World Bank that are accompanied with strict conditions that starve the economy of the much needed growth.
“Considering this increase, and given that the government is continually borrowing to pull itself out of the cash crunch, things are not looking better,” Atwoli said.
The report calls on the government to swiftly restore investor trust since several investors continue to shop for investment opportunities in the country.
It further recommends that the country adopt zero tolerance to corruption by investing in human, physical and financial resources for corruption surveillance and crackdowns.