NAIROBI, Kenya – The Central Organisation of Trade Unions (COTU) has applauded President William Ruto’s decision to grant tax relief to salaried workers, calling it a significant step towards easing the financial burden on Kenyan employees.
COTU Secretary General Francis Atwoli lauded the move, noting it demonstrates the President’s willingness to address workers’ grievances, particularly concerns about double taxation.
The relief, announced by the Kenya Revenue Authority (KRA) on Thursday, ensures that deductions for the Housing Levy and Social Health Insurance Fund (SHIF) will no longer be subjected to Pay-As-You-Earn (PAYE) tax.
“This timely intervention will significantly ease the financial burden on salaried workers who have in the past borne the weight of double taxation,” Atwoli said.
He credited the relief to “constructive engagements” between COTU and President Ruto, highlighting that the union had raised concerns over shrinking disposable incomes caused by the existing taxation regime.
Atwoli argued that double taxation had eroded workers’ take-home pay, leaving families struggling to meet daily expenses.
“Kenyan workers were disgruntled, and rightly so. The deductions for the Housing Levy and SHIF being subjected to PAYE meant they were taxed twice. This move translates to better-looking payslips, freeing up additional income for families,” Atwoli added.
The KRA clarified that the tax relief will take effect following the implementation of the Tax Laws Amendment Act, 2024, beginning December 27.
Under the new provisions, contributions to the Affordable Housing Levy, SHIF, and certain pension schemes will be tax-deductible.
Mortgage interest of up to Sh360,000 annually and post-retirement medical fund contributions capped at Sh15,000 monthly are also included in the relief measures.
The decision marks a reversal of policy after the KRA suspended all tax reliefs in February 2023, citing unprocedural exemptions that led to tax arrears exceeding Sh1 trillion.
COTU has urged the government to continue fostering social dialogue as a means of resolving pressing economic issues.
Atwoli emphasized that collaborative engagement among workers, employers, and the state remains key to achieving long-term, sustainable solutions for Kenya’s workforce.
“This move reflects the power of dialogue in improving industrial relations and enhancing workers’ welfare. COTU remains committed to championing the rights of workers and ensuring a fair, harmonious labor environment,” he said.
COTU Secretary General Francis Atwoli lauded the move, noting it demonstrates the President’s willingness to address workers’ grievances, particularly concerns about double taxation.
The relief, announced by the Kenya Revenue Authority (KRA) on Thursday, ensures that deductions for the Housing Levy and Social Health Insurance Fund (SHIF) will no longer be subjected to Pay-As-You-Earn (PAYE) tax.
“This timely intervention will significantly ease the financial burden on salaried workers who have in the past borne the weight of double taxation,” Atwoli said.
He credited the relief to “constructive engagements” between COTU and President Ruto, highlighting that the union had raised concerns over shrinking disposable incomes caused by the existing taxation regime.
Atwoli argued that double taxation had eroded workers’ take-home pay, leaving families struggling to meet daily expenses.
“Kenyan workers were disgruntled, and rightly so. The deductions for the Housing Levy and SHIF being subjected to PAYE meant they were taxed twice. This move translates to better-looking payslips, freeing up additional income for families,” Atwoli added.
The KRA clarified that the tax relief will take effect following the implementation of the Tax Laws Amendment Act, 2024, beginning December 27.
Under the new provisions, contributions to the Affordable Housing Levy, SHIF, and certain pension schemes will be tax-deductible.
Mortgage interest of up to Sh360,000 annually and post-retirement medical fund contributions capped at Sh15,000 monthly are also included in the relief measures.
The decision marks a reversal of policy after the KRA suspended all tax reliefs in February 2023, citing unprocedural exemptions that led to tax arrears exceeding Sh1 trillion.
COTU has urged the government to continue fostering social dialogue as a means of resolving pressing economic issues.
Atwoli emphasized that collaborative engagement among workers, employers, and the state remains key to achieving long-term, sustainable solutions for Kenya’s workforce.
“This move reflects the power of dialogue in improving industrial relations and enhancing workers’ welfare. COTU remains committed to championing the rights of workers and ensuring a fair, harmonious labor environment,” he said.
