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Public Sector Threatens Strike Over Taxation

Trade Unions in the Public Sector of Kenya have expressed their distress over proposed taxation in the 2023 Finance Bill. The concerned parties have warned that they will go ahead with industrial action if the amendments are enacted into law.

The Secretary General of Kenya Universities Staff Union, Charles Mukhwaya, read a statement urging the government to reduce taxes on public sector workers and engage the representatives of workers unions to discuss the best way forward.

Mukhwaya further stated that the proposed amendments to the 2023 Finance Bill would see up to 22 percent of monthly earnings being deducted, with the remaining 48 percent subjected to a 16 percent Value Added Tax (VAT) of all goods and services purchased. With the ever-increasing prices, this move would make public sector employees live as slaves who cannot afford a decent life.

Francis Atwoli, the Secretary-General of COTU, has advised the government to proceed with caution when it comes to tax hikes, highlighting that they could have counterproductive effects. According to Atwoli, the Kenyan economy is facing several challenges, including high inflation rates and the high cost of living. Despite these challenges, the government is yet to address them.

The Treasury recently submitted the 2023 Finance Bill to Parliament proposing changes to the Employment Act. This proposal involves allowing the deduction of three percent from employees’ basic pay to support President William Ruto’s plan to construct affordable homes. However, Ndung’u has capped the deductions at 5,000 shillings, which is largely a reintroduction of a policy rejected during former President Uhuru Kenyatta’s administration.

Apart from this, the bill proposes various taxes that will have a significant impact on digital content creators, owners of platforms that facilitate digital asset trading, and beauty product consumers. One of the proposals is a withholding tax of 15% on payments linked to monetizing digital content, which could have an impact on the livelihoods of numerous young individuals who work in the digital industry. The bill also proposes to introduce a tax on imported human hair, eyelashes, switches, and artificial nails, which will raise the prices of these products.

Imported fish will face a tax of either 20% of its value or Sh100,000 per metric tonne, whichever amount is greater. A tax of Sh25 per kilogram will be levied on powdered juice, whereas sugar (excluding that purchased by a registered pharmaceutical manufacturer) will face a tax of Sh5 per kilogramme. Wigs, false beards, and eyebrows, which are mostly imported, have grown in popularity, but they will also face taxation.

In conclusion, Kenyan public sector workers have expressed their dissatisfaction with the proposed changes in the 2023 Finance Bill. With various stakeholders calling on the government to ease the tax burden on employees, it remains to be seen how the Finance Bill will pan out. Nevertheless, the public sector workers are closely monitoring the situation and may take industrial action if the government does not address their concerns.

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