The Central Organization of Trade Unions (COTU) Secretary-General Francis Atwoli has welcomed the Kenya Revenue Authority’s (KRA) recent changes to payslip deductions, calling them a significant relief for salaried workers.
On Thursday, December 19, 2024, KRA announced that deductions for the Social Health Insurance Fund (SHIF), Housing Levy, and post-retirement medical funds would no longer be factored into the calculation of Pay-As-You-Earn (PAYE) tax starting this December.
In a statement issued Friday, December 20, Atwoli applauded the decision, noting that it addressed long-standing concerns about double taxation raised by Kenyan workers.
“The Central Organization of Trade Unions (Kenya), COTU (K), on behalf of Kenyan workers, wishes to express its appreciation to President William Ruto for listening to our concerns and granting tax relief on the Housing Levy and Social Health Insurance Fund. This move will significantly ease the financial burden on salaried workers, who have long borne the weight of double taxation,” Atwoli said.
He explained that the deductions for SHIF and the Housing Levy were previously subjected to PAYE, eroding workers’ disposable income and reducing their take-home pay.
Atwoli revealed that COTU had engaged President Ruto through social dialogue, emphasizing the need to address the issue.
“This decision translates to better-looking payslips, freeing up income for workers to provide for their families and contribute to the economy,” he added.
KRA also clarified that mortgage interest payments of up to Ksh30,000 per
month would no longer be included in PAYE calculations. Additionally, contributions to registered pension or provident funds, or individual retirement funds, up to Ksh360,000 annually or Ksh30,000 per month, would remain exempt from taxation.
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