Govt Plans to Tax Employed Citizens to Pay Jobless Kenyans

  • Job seekers in Kenya.
    Job seekers in Kenya.
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  • The government through the National Treasury plans to impose a 2% tax on employed citizens that will cushion the unemployed.

    The proposal is part of a post-Covid-19 economic recovery strategy that is set to increase taxation for employed persons.

    The 2% tax will be split between the employer and the employee and is expected to be adopted once the government sets up the Unemployment Insurance Fund (UIF).

    Jobseekers queue on Wabera Street, Nairobi, as they wait to be interviewed by The Sarova Stanley on May 26, 2018.
    Jobseekers queue on Wabera Street, Nairobi, as they wait to be interviewed by The Sarova Stanley on May 26, 2018.
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    "The government will establish a UIF to cushion workers in financial distress by providing them with short-term relief when they become unemployed or are on unpaid leave or unable to work because of illness.

    “The amount of contribution to the fund will be two percent which includes one percent paid by employees from remuneration paid and one percent paid by the employers," read a statement from National Treasury.

    The government through the Ministry of Planning and National Development plans to raise Ksh300 Million by 2022 to cushion the unemployed.

    This is set to come as a huge relief for a number of Kenyans who were rendered jobless during the Covid-19 pandemic as the economy took a hit.

    Back in April, the government introduced a pilot cash transfer program that cushioned elderly and most vulnerable members of the society to buy food while coping with the effects of the Covid-19 pandemic.

    Aside from the proposed Unemployment Insurance Fund the government also has the Inua Jamii social protection program, which provides cash to orphans and vulnerable children, older persons and people with severe disabilities.

    According to the quarter two Labour Force Report by the Kenya National Bureau of Statistics (KNBS) released in September 2020 the rate of joblessness doubled from April to June.

    The number of those unemployed increased to 4,637,164 between April and June this year compared to 2,329,176 same period last year.

    Kenyan Currency notes.
    Kenyan Currency notes.
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