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Government and Policy

The 1% Salary Deduction was a Typographical Error – Henry Rotich

BY Soko Directory Team · June 20, 2018 10:06 am

When the Cabinet Secretary for Treasury Henry Rotich presented to the nation the 2018/2019 national budget, Kenyans had the hope of having a reprieve from the already hard life.

To the surprise of many, Rotich slapped Kenyans with numerous taxes in what was seen as an all-out move by the government to squeeze taxes from Kenyans.

What shocked many Kenyans was the proposal in the Finance Bill that required Kenyans in the formal sector to pay 1 percent of their salary towards the construction of affordable housing as indicated in President Uhuru Kenyatta’s Big Four Agenda.

It is now appearing that the 1 percent was a ‘typographical’ error according to CS Rotich and one that will be dealt with as it goes through parliament.

According to the CS, the one percent charge contained in the Finance Bill was a mistake that will be corrected. The CS said that the right charge was 0.5 percent and not one percent.

Mr. Rotich had pegged the charge at 0.5 percent to be deducted on salaries of individuals in the formal sector, with a similar 0.5 percent from employers up to a maximum of 5,000 shillings monthly.

The Finance Bill, on the other hand, had doubled the charge to one percent something that would have hit hard on Kenyans.

The implementation of the bill, upon passage, means that an employee who earns 200,000 shillings will contribute 1,000 shillings every month up to the maximum of 5,000 shillings for those earning 1,000,000 shillings and above.

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