- In a review report for the first three months of the financial year 2023/2024, Margaret Nyakang'o warned that high taxes were eroding employees' purchasing power
- She noted that the reduced purchasing power was responsible for the decline in taxes collected by the Kenya Revenue Authority (KRA)
- President William Ruto introduced a raft of taxes under the Finance Act 2023, hitting employed Kenyans hard
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TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.
Controller of Budget (CoB) Margaret Nyakang'o has asked the national government to stop increasing taxes on employed Kenyans amid harsh economic times.
How are high taxes hurting Kenyan employees?
In a national government implementation review report for the first three months of the financial year 2023/2024, Nyakang'o warned that high taxes were eroding employees' purchasing power.
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She noted that the reduced purchasing power was responsible for the decline in taxes collected by the Kenya Revenue Authority (KRA).
"The shortfall in revenue collection results in delays in financing government programmes, affecting the delivery of services to the citizens based on promises by the government of the day. The controller of budget recommends that the government, through the KRA, enhances revenue mobilising strategies," Nyakang'o stated.
The independent officeholder advised President William Ruto to widen the tax base by creating more jobs.
"These include creating more employment opportunities for the unemployed Kenyans and bringing more people into the tax bracket, unlike increasing taxes for the employed Kenyans, which erodes the purchasing power, resulting in counter-productivity," she said.
Why are working Kenyans poor?
Nyakang'o's report came after a survey by the International Labour Organisation (ILO) showed that a staggering 80% of employed Kenyans were grappling with poverty because their wages could not cover basic necessities.
The percentage accounts for about 15.3 million Kenyans, which paints a stark reality of the financial hardships they undergo despite being part of the workforce.
ILO's latest data on working poverty revealed distressing metrics as 26% of working Kenyans were categorised as extremely poor.
A further breakdown indicated 29% and 25% were classified as moderately poor and near poor, respectively, bringing the total percentage of Kenyans working but poor to 80%.
The unemployment rate in Kenya further paints a grimmer picture of the financial struggles faced by Kenyans at the lower end of the economic pyramid.
Ruto introduced a raft of taxes under the Finance Act 2023, hitting employed Kenyans hard.
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