Kenyans have been warned to prepare for delays in their April salaries as a result of the members of parliament agreeing to the tax reliefs announced by President Uhuru Kenyatta.
It turns out employers are juggling with the options of complying with President Kenyatta’s proposed changes to the pay-as-you-earn (PAYE) regulations which were approved on Wednesday, April 22.
Already, some sectors have been warned of delays given that the employers had adopted a wait and see approach to see if the President would assent to the new measures soon enough for their benefit and that of the employees.
The public sector’s Integrated Payroll and Personnel Database (IPPD) for instance been reportedly locked and processing of April salaries put on hold in anticipation that the Bill will have assented into law early enough.
Workers under the Parliamentary Service Commission (PSC), Teachers Service Commission (TSC) and the disciplined forces, whose salaries are processed as early as 20th of every month, have been told to expect delays.
“Our IPPD systems countrywide are locked. This is to advise all of you to prepare for the delay in salary processing,” a notice by the IPPD team reads in part.
The delays might also be propagated in part by the haggling by the members of the National Assembly that saw some of the proposals by President Kenyatta thrown out and new ones introduced.
This is set to cause a showdown between the legislature and the executive when the president will be required to assent to the bill as they both lobby for common ground before the bill becomes law.
While the Members of the National Assembly agreed with the nobility of the president reducing income tax, they rejected some revenue-raising proposals such as a tax on food and agricultural inputs.
The MPs stopped the Treasury from imposing taxes on bread, cooking gas, milk, fishing nets, medical products, fertiliser, mosquito nets and agricultural pest control products as well as animal products.
President Kenyatta has the option of either accepting all the changes and assenting to the Bill or rejecting some clauses and referring them back to the House with his recommendations, in effect leading to a delay in implementation.
The Kenya Revenue Authority (KRA) will only officially recognize the tax cuts once the President assents to the Bill meaning that if not done soon enough, the president's directive will not take effect on this month's salaries.
With the law having it that companies have until the 9th of the month to submit returns for the previous month, the companies that choose the wait-and-see approach will have a maximum of two weeks to see if the president will follow through on his directive.
This delay would in effect lead to the delay of salaries for their employees.
