Cabinet Secretary for the National Treasury, John Mbadi, has publicly faulted Kenya’s current tax structure for placing an undue burden on low-income earners, specifically citing the taxation of individuals earning Sh30,000 per month.
The CS pointed out that it is becoming difficult to justify taxing someone who is taking home Sh30,000 pay in this economy.
Speaking at a public stakeholder forum, he noted that when you look at the cost of basic necessities like food, transport and rent what remains is barely enough for subsistence.
“That’s not a salary that the government should be coming to tax, that’s survival salary, yet the rent you are paying is Sh10,000, the money you are eating with your wife and kids, Sh10,000 and the school fees you are paying is also Sh10,000 you don’t even have money remaining to send to your mum,” said Mbadi.The forum at Kiambu National Polytechnic was part of the Budget and Privatisation Public Engagement Forum for Kiambu County. Mbadi focused on government plans to privatise state-owned companies and use the proceeds to fund infrastructure and provide tax cuts.
The Cabinet Secretary highlighted the strain on Kenya’s middle class and salaried workers, noting that about 3.5 million Kenyans rely on salaries and bear most of the tax burden.
“If you add some Sh5000 for transport and yet we are also coming for another Sh6000 or Sh7000 for tax, it doesn’t make sense,” said Mbadi.For a monthly salary of Sh30,000 in Kenya, you’d pay around Sh201 in Income Tax (PAYE), but total deductions (including NSSF & NHIF) bring total tax deductions to about Sh4,401, leaving a net pay of roughly Sh25,599.
This is based on the 10 per cent tax band for the first Sh24,000 and 25 per cent for the amount between Sh24,001 and Sh30,000, after applying personal relief and mandatory contributions like NSSF and NHIF.
The additional 25 per cent means that Kenyans take home Sh24,580.
