The Finance Bill, if passed by parliament, will have an impact on those earning a salary of Ksh 50,000. The most significant changes concern taxes. The Finance Bill seeks to increase the Pay-As-You-Earn (PAYE) tax rate from the current 10% to 12%. This means that a person earning a salary of Ksh 50,000 will have an additional Ksh 1,000 tax per month to pay. The Finance Bill will also reduce the personal income tax bands from five to four, with the top bracket of 30% tax applying to those earning more than Ksh 250,000. This will mean that those earning Ksh 50,000 will now pay 20% tax instead of 25% tax as previously.
The bill also proposes to increase the excise duty on fuel by 15%, which will lead to an increase in the cost of fuel. This will in turn affect the cost of transportation for those earning Ksh 50,000. The cost of goods and services in the country, which are largely determined by fuel costs, will also increase leading to a higher cost of living.
The Finance Bill will also increase the value added tax from 16% to 18%, which means that the cost of goods and services in the country will increase. This could lead to individuals with a salary of Ksh 50,000 spending more of their income on basic needs. The Finance Bill also seeks to increase the tax that corporations are required to pay on profits from the current 30% to 35%. This could reduce corporate profits, leading to lower salaries, bonus and promotions for those earning Ksh 50,000.
All in all, the passage of the Finance Bill by to parliament will have negative impacts for those earning a salary of Ksh 50,000. This is because of the increase in the cost of living due to the tax changes as well as the reduced earnings from corporate profits. Therefore, it is important for individuals earning Ksh 50,000 to plan ahead and save some of their income in order to stay afloat and prepare for the changes to come.
by: your-udaku-mate