Bankers in Kenya are now raising concerns over the heavy tax burden on salaried workers, warning that it could slow down the country’s economy if nothing changes.
In a recent interview, Raimond Molenje, who serves as the Chief Executive Officer of the Kenya Bankers Association, said that many taxes and deductions are being imposed on a few employed individuals in the country.
He said, “If every new tax and charge continues to be piled on top of salaried workers, we risk pushing our economy to a breaking point.” He also said that the country cannot rely on a few individuals to support its economy, and therefore, the government should consider creating more jobs for individuals so that they can also contribute to the taxes and development of the economy.
He said, “The more people we employ, the more money we spend, and therefore, our businesses will thrive, leading to more production and employment opportunities.”
“But we need to create more jobs to expand the tax base instead of overloading the few who are already paying,” he added.
His sentiments come just a short while after the Federation of Kenya Employers (FKE) made a similar plea.
In a press release dated March 18, FKE CEO Ms. Jacqueline Mugo called on the government to urgently review taxes and deductions affecting workers in the public and private sectors.
She noted, “The rising taxes, coupled with the high cost of living, have led to a situation where workers are receiving very little from their pay, thus making the concept of formal employment less attractive.”
She further noted, “In addition, the high operating costs, including the high cost of energy, wages, and regulatory requirements, are affecting businesses, which are likely to downsize in the coming months.”
FKE noted in a press release dated March 18, “Employment has been reduced by about 12 percent, as indicated in a recent survey, particularly in the manufacturing, retail, hospitality, transport, and financial services sectors.”
As the sentiments of both bankers and employers are raised, pressure is mounting on the government to review tax policies in the country.