President proposes removal of taxes on retirement benefits, bonuses and overtime
President Uhuru Kenyatta has instructed National Treasury to waive taxation on payments of bonuses, overtime and retirement benefits for low-income earners. The President, who was speaking at the 2016 Employers Summit in Naivasha, also urged COTU and the Federation of Kenyan Employers (FKE) to actualise the creation of a Centre to promote productivity.
The President said his directive was part of the conscious drive to continually strive to improve the living standards of Kenyans.He also said that he has instructed the National Treasury to include the proposal in the 2016 Finance Bill for implementation.
President Kenyatta’s directive follows a plea by the Central Organisation of Trade Unions (COTU) for the Government to save employees from taxation on payments including retirement savings.
The President, however, said that the taxation adjustment should be done in a manner that does not cause the cost of employment to increase.
At the same, the President called on the private sector to view the Government as a partner and prioritise efforts to deal youth unemployment.
He called on the private sector to play a more proactive role in giving skills to youth and creating jobs for them.
He also called on the business community to implement affirmative action to support the youth just like the Government has adopted procurement rules that are youth friendly.
The President said youth unemployment is at a crisis level in Africa and described the problem as an existential threat for the continent.
At the Summit, attended by representatives from more than 34 African countries, the Government was commended for making it easy to do business in Kenya.