Low income earners in Kenya have something to smile about from the just read 2017/18 national budget after the National Treasury increased an income tax band in a move that is set to shield low -income earners from paying taxes.
In the initial budget, the lowest tax band started at 11,180 shillings while those on the upper band were those earning 42,782 shillings. In the new budget, however, low tax band has been increased to 13,486 shillings while the upper tax band has been raised to 46,960 shillings per month.
According to these new changes by the Treasury, individuals earning 13,486 shillings will pay 10 percent in taxes with a portion beyond the lower band at 15 percent up to 23,886 shillings. The incomes up to 36,473 shillings will attract 20 percent tax with an increase to 25 percent to those earning up to 46,960 shillings. The Treasury often takes a 30 percent tax to all earnings above the highest band, in this case 46,960 shillings.
In the new changes, too, personal relief will go up by 10 percent. The government hope to give relief to low-income earners even as inflation continues to rise. During the reading of the budget, the Cabinet Secretary also announced that the hiring of workers by the government stands frozen except for the key sectors such as education, health and the police force.