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Kenya: Please Don’t Touch Our Cash, Pensioners Say

Published

6 years ago

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Senior citizens have protested the move to tax their pensions, saying the move would reduce their only source of income and send them to an early grave.

Bar owners also put up a spirited fight yesterday, opposing Treasury Cabinet Secretary Ukur Yatani’s proposals to increase tax on Senator keg beer, which is popular with the low-income earners.

The Bar Hotels Liquor Association of Kenya argues that its 54,000 members across the country are losing a total of Sh200 million daily, and they should be spared additional taxes, especially at this time. Also to go up is the price of spirits and liqueur with higher alcohol content.

The association wants its members be allowed to close business at 9pm like other businesses, instead of 4pm. Currently, hotels and restaurants are allowed to open from 5am to 4pm.

“We would like to propose a revision of the decision to publish the amendment of the Excise duty remission on sorghum and keg-making grains to 60 per cent and maintain it at 80 per cent,” said the association’s chairman Simon Njoroge.

MARGINAL CHANGE

“At the moment, a huge marginal change would gravely harm the industry, which would negatively impact the economy and lead to the re-emergence of illicit brew consumption,” Mr Njoroge said, adding that the introduction of the Excise Duty Act (2015) had led to the loss of nearly 150,000 jobs.

In a separate memorandum to Parliament, a pensioner’s lobby group says the removal of the pension tax exemption for retirees above 65 will make them receive significantly lower payments. The lobby says pension benefits are the only source of livelihood for most retired Kenyans.

“Retirees aged 65 and above are very vulnerable members of society. This group is highly susceptible to a variety of chronic diseases such as cancer, diabetes, high blood pressure, incontinence, dementia and multiple chronic conditions,” it adds, noting that the diseases are expensive to treat, and insurance companies are reluctant to provide health policies to those above 65 years of age. “The Cabinet Secretary should, therefore, consider other areas of raising revenue and/or reduce government expenditure,” the group adds.

It says that supporting the deletion of Paragraph 53 of the bill is tantamount to exposing many retirees to premature death.

In the new finance bill currently before Parliament, the Treasury wants to tax all income from the National Social Security Fund (NSSF) as part of its strategy to raise an additional Sh38.9 billion.

UNPOPULAR MEASURES

The proposal to tax retirees is one of the most unpopular measures unveiled by Yatani. The new measures will also raid income from registered home ownership savings plans, bonus and overtime.

The new taxes will also see the prices of liquefied petroleum gas, helicopters and aeroplanes not exceeding 2,000 kg, tractors, (other than road tractors for semi-trailers), aircraft pneumatic tyres, and materials for the manufacture of automotive and solar batteries go up.

Others are goods for cleaning, cooking stoves, cookers and barbecue grills.

Also one motor vehicle imported by a public officer returning from a foreign posting will attract a 14 per cent VAT, as will plant, machinery and equipment for building plastic recycling plants and services such as hiring helicopters.

Online traders will also now have nowhere to hide after the introduction of a digital service tax at the rate of 1.5per cent of the gross transaction value.

MINIMUM TAX

A new tax to be known as minimum tax has also been proposed to be charged on the gross revenues of all loss- making companies. In the past, companies that made losses were spared the burden of paying corporate income taxes. But businesses will pay the higher of either the minimum or instalment tax.