Treasury Cabinet Secretary Njunguna Ndung’u on Thursday, June 13, announced measures aimed at dealing with double taxation for salaried Kenyans.....CLICK HERE TO READ THE FULL ARTICLE>>>
While reading the 2024/2025 Budget, Ndung’u acknowledged that salaried Kenyans were taxed double given that the Housing Levy and the Pay As You Earn (PAYE) are taxed on the same gross salary base.
Therefore, he proposed amendments to make the Housing Levy a deductible tax. This move will see PAYE and Housing Levy taxed on different gross income levels.
For instance, under the current model, if a person earns Ksh40,000 in gross pay, the Housing Levy deduction will be based on that gross pay. Equally, the PAYE will be determined based on that Ksh40,000 gross pay.
However, by making the levy adeductible tax, the PAYE can now be determined based on (Ksh40,000 minus the Housing Levy).
Ultimately, with the new changes, the taxman will be taking less than it does currently. “The Affordable Housing Levy and PAYE are calculated from the same base leading to double taxation. To address this, I propose to make the Housing Levy a deductible expense,” he proposed.
“This means that there is a tax saving for Kenyans therefore affording Kenyans more money in their pockets.” The Housing Levy was introduced in the Finance Act 2023
and is set at the rate of 1.5 per cent of the gross salary and income. However, despite the announcement from the CS, Kenyans are expected to witness more salary deductions in the coming days following the anticipated launch of the Social Health Insurance Fund (SHIF).
Registration for the new health insurance is set to commence on June 21. Kenyans will be paying 2.75 per cent of their gross salaries so as to be covered in the new insurance scheme. Deductions will begin from July 1…CONTINUE READING>>
