A parliamentary watchdog committee is set to grill the National Treasury over revelations that thousands of civil servants are taking home less than a third of their salaries due to excessive loan deductions and statutory obligations.
The Public Accounts Committee (PAC) has raised the alarm over the drastic reduction in net pay, blaming new deductions introduced under President William Ruto’s administration, including the Housing Levy, Social Health Insurance Fund (SHIF) contributions, and higher National Social Security Fund (NSSF) rates.
Tindi Mwale, Butere MP and PAC chairperson, expressed concern that multiple government departments are violating labor laws by allowing deductions exceeding the legal limit of two-thirds of an employee’s basic salary.
“The law is no longer practical due to multiple tax deductions that have eroded workers' earnings,” Mwale said, referencing Section 19(3) of the Employment Act, 2007, which safeguards employees from excessive deductions.Civil servants have faced shrinking paychecks in recent months, with 1.5% of gross pay going to the Housing Levy, 2.75% to SHIF, and increased NSSF contributions.
The committee has now instructed the Treasury to consult Attorney General Dorcas Oduor on whether the one-third salary rule should be scrapped or revised to reflect the current tax burden.
The issue emerged during a session with Correctional Services Principal Secretary Dr. Salome Beacco, who was responding to audit queries.
Lugari MP Hon. Nabii Nabwera warned that unless resolved, the problem will persist in future audit reports.
“We need a definitive ruling on this issue. Given the current deductions, the one-third rule is clearly untenable,” Nabwera stated.Funyula MP Dr. Wilberforce Oundo admitted that Parliament bears responsibility for the crisis, having approved the contentious levies.
“These employees are not the authors of their misfortune. It is Parliament that passed these punitive taxes. If blame is to be placed, it lies squarely with MPs who sang ‘Hallelujah’ as the laws sailed through,” Oundo said.A June 2023 audit of the Integrated Personnel and Payroll Database (IPPD) revealed that 4,082 government officers were left with less than one-third of their basic pay—a violation of public service regulations.
The Treasury now faces mounting pressure to address the crisis as civil servants struggle with dwindling take-home pay.
