The Federation of Kenya Employers (FKE) on Tuesday, May 16 warned of mass sackings should the Finance Bill 2023 sail through as is.
Speaking in Nairobi, FKE Executive Director Jacqueline Mugo, noted that any additions to its members' expenditure would see many employers declare many workers redundant in line with the economic situation.
She explained that many employers were spending the majority of their earnings on payment of taxes and levies.
In particular, she stated that the proposal of the housing levy of 3 per cent barely came after the implementation of the new National Social Security Fund (NSSF) rates.
"At this point, the federation finds it difficult to support the housing levy as proposed. Our members have complained. It is coming at the heel of very many other proposals that constitute taxes and levies.
"We have just implemented the NSSF at 6 per cent. The National Health Insurance Fund (NHIF) is coming going to 2.75 per cent of an employee's salary and we have not even talked about the finance bill," she stated.
Consequently, the employers pleaded with Ruto to make the monthly housing deductions voluntarily in order to protect the jobs of many Kenyans.
"Could we make it voluntary, that is what the federation has asked. The government can withhold some of the planned projects and give us some reprieve. If the economy is doing well, the enterprises can pay taxes," she added.
The federation revealed its stand over the Housing Fund which has been opposed by a number of workers unions.
According to the Finance Bill 2023, employers will part way with 3 per cent of their salaries as the employers also match the employee's deductions.
Notably, President William Ruto has defended the proposed deductions noting their importance to many Kenyans who did not have houses.
While addressing the nation during a roundtable interview with journalists on May 14, Ruto maintained that the deductions were not a tax but a contribution with benefits.
He also indicated that the government was also aiming at creating more job opportunities through affordable housing projects.
"A tax goes one way and you ner get it. This is not a tax. It is your money. Today, Kenyans contribute 6 per cent of their salary to NSSF which is not a tax," he explained.
