GoK Will Soon Deduct 2% Of Your Salary To Pay The Unemployed

Will you let the government of Jubilee deduct 2 percent of your salary to support the unemployed? With the high levels of corruption in Kenya, do you think that money will reach the intended beneficiaries?

The National Treasury proposed that employed Kenyans could be obligated to pay a 2 percent tax from their incomes to cushion the unemployed as part of new government plans in the next two years.

“The government will establish a UIF to cushion workers in financial distress by providing them with short-term relief when they become unemployed or are on unpaid leave or unable to work because of illness,” the National Treasury said.

According to the National Treasury, proceeds from the tax to be partly contributed by employers at the rate of one percent are expected to go into the soon to be set up unemployment insurance fund (UIF).

The proposal is expected to set the stage for increased taxation for employed individuals who already account for a number of other statutory deductions such as NHIF and further indirect taxes as part of the COVID-19 economic recovery strategy.

According to the Kenya National Bureau of Statistics (KNBS), only 15.9 million Kenyans found in both the formal and informal sectors would be eligible for the tax with other Kenyans being unemployed or outside the labor force.

Meanwhile, while the number of unemployed Kenyans according to KNBS is 1.8 million through the strict unemployment definition, the true number of those unemployed is masked by the number of inactive members of the labor force who exceed 7 million by count.

Current reports also show that Kenya’s unemployment doubled between April and June to 10.4 percent from 5.2 percent in March to 1.7 million as Kenyans kept losing jobs due to the COVID-19 pandemic and restrictions.

Kenya National Bureau of Statistics (KNBS) said that with all data combined, more than 1.9 million Kenyans have lost their jobs since the turn of the year.