Home GENERAL NEWS Why top earners are not yet off the hook

Why top earners are not yet off the hook

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Top earners and salaried employees have a reason to worry after Treasury Secretary Henry Rotich said he plans to introduce a new income tax law to boost revenue.

This comes as various stakeholders gave mixed reactions to the budget proposals presented by Mr Rotich on Thursday.

He said the bill is being drafted and will be introduced in Parliament next month. “There are many high-income earners that are not properly taxed while others are tax-exempted. We are set to review this soon,” Mr Rotich told reporters at Parliament.

“Do not expect much surprise, but we want to make the law more progressive as far as the tax bracket is concerned.”

According to the Income Tax Bill 2018, the Kenya Revenue Authority will deduct 10 per cent from the first Sh147,580 and 15 per cent from the next Sh139,043 from your payslip.

Individuals with an income of more than Sh9 million per year will have to part with 35 per cent of their earnings to the taxman, and those earning from Sh564,709 to Sh9 million will remit 30 per cent. But, he said he was still consulting over the 35 per cent figure.

Meanwhile, boda-boda operators have given mixed reactions to the proposed amendment of insurance rules to require all riders to have an insurance cover for passengers and pedestrians.

In Kisumu, operators welcomed the proposal, saying it would help victims of accidents.

Kisumu County Boda-Boda Riders Co-operative Union chairman Willis Aketch said accident victims, including riders, have been forced to dig deeper into their pockets due to lack of an insurance cover. “Because it will be helpful to everyone, the idea is good,” he said.

But Mr Godfrey Omwenga, a boda-boda cyclist in Kisii, said the move is punitive. “We in the boda-boda sector are likely to suffer immensely. This will be in addition to the tribulations we are facing as we are forced to comply with traffic regulations,” said Mr Omwenga.

But Ms Jane Mokeira, also in Kisii, lauded the move, saying it will restore sanity in the sector.

Mr Bramwel Litunya, a sales agent in Kisii, took issue with the decision to tax services like security, cleaning and fumigation, catering offered outside hotel premises, transportation of goods, sales promotion, and marketing and advertising.

While Mr Rotich said this measure will enhance tax compliance among people offering these services, Mr Litunya opposed it, saying it will kill small businesses. “This is likely to negatively impact small entrepreneurs, who are struggling to make ends meet,” said Mr Litunya.

However, Mr Anthony Mokaya, who works in Kisii, lauded the move to protect the timber and furniture industry from the proliferation of cheap finished products.

Mr Rotich proposed to retain an ad valorem rate (in proportion to the estimated value of the goods or transactions) of import duty at 25 per cent. “This will enhance local and quality production of timber,” said Mr Mokaya.

Those happy with the budget include county health executives and experts after the government allocated Sh47.8 billion to the sector — to support the activities and scaling up of the Universal Health Coverage (UHC) scheme from the four pilot counties to the rest of the country.

The scheme was launched last year in Kisumu, Nyeri, Isiolo and Machakos.

Makueni Health executive Andrew Mulwa, who is also the chair of the caucus of county health executives, expressed hope that the money will be given to counties as conditional grants.

But Ms Catherine Kyobutungi, the director of the African Population and Health Research Centre, told the Nation she is keen to see a percentage of the funds allocated to non-communicable diseases like cancer.

Nursing Council of Kenya chief executive Edna Tallam lamented that the ratio of nurses and midwives to expectant mothers does not meet the required World Health Organisation guidelines.

The current ratio stands at one nurse to 45 expectant women, compared with the recommended ratio of one nurse to 15.

“We need to fix health systems by allocating budgets to hire more nurses and acquire the right facilities to reduce cases of maternal and childbirth deaths,” she said.

Meanwhile, farmers in the North Rift have described the budget as the “worst in [as] many years”.

Led by Moiben MP Silas Tiren and Kenya Farmers Association director Kipkorir Menjo, they said the government failed to set any funds aside to buy maize.

“At least the government set aside some funds to purchase two million bags in the last season even though they ended up buying only 500,000. Now there’s nothing,” Mr Tiren said.

Reported by Samwel Owino, Victor Otieno, Ruth Mbula, Verah Okeyo, Anthony Kitimo, Stanley Kimuge and Brian Okinda

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