In a move that has sent shockwaves through the education sector, teachers and civil servants in Kenya are facing an unfortunate double tragedy – a significant reduction in their take-home pay due to the implementation of a double taxation policy.
This new development comes as a result of the government’s decision to enforce a controversial affordable housing tax, causing distress among the affected workers.
The Ministry of Lands, Public Works, Housing, and Urban Development took a bold step in July, retroactively imposing a 1.5 percent deduction on both employees’ and employers’ gross monthly wages. This mandate, which aims to fund the creation of affordable housing for low-income individuals, has not been without its share of challenges.
The policy requires employees and employers alike to contribute a portion of their earnings – 1.5 percent each – to this affordable housing tax. With the recent enforcement, workers are now witnessing a 3 percent decrease in their monthly compensation, resulting in mounting concerns over financial stability.
For instance, an individual with a gross monthly salary of 50,000 shillings faces a loss of 1,500 shillings due to this housing tax. As the income bracket increases, the impact of the tax becomes even more significant.
Those earning 100,000 shillings lose 3,000 shillings, while those with a gross monthly salary of 200,000 shillings find themselves dealing with a substantial reduction of 6,000 shillings over the span of two months.
Public outrage over the double taxation policy led to a reduction in the monthly housing allowance from 3 percent to 1.5 percent. Despite the government’s effort to address concerns, many teachers and civil servants continue to voice their dissatisfaction.
Deputy President Ruto acknowledged the hardships faced by the workforce, stating, “Even if we experience 3 percent pain, we are still alive. Seven million Kenyans live in slums and among millions of young people looking for work. We are human if we share in the suffering of others.”
Adding to the complexities, this new tax has transformed into a charge, collected by the Kenya Revenue Authority alongside other levies. Furthermore, the original plan for employees to transfer their paychecks to family members has been curtailed, adding another layer of financial stress.
As the nation grapples with the consequences of this housing tax, the education sector stands at a crossroads. Teachers and civil servants, who play crucial roles in shaping the country’s future, find themselves caught in the crossfire of economic policy decisions.
The tension between the government’s housing initiative and the financial stability of these essential workers remains a topic of intense debate.
In conclusion, the implementation of the double taxation policy for affordable housing has cast a shadow over the lives of teachers and civil servants in Kenya. The reduction in their earnings has prompted concerns about personal finances and overall well-being.
As the nation navigates through these challenges, finding a balance between funding essential initiatives and safeguarding the livelihoods of its workforce is a delicate task that requires careful consideration.
by: DMNEWS