AN OVER-BURDENED TAXPAYER

On May 1, 2013 the then newly-elected president announced a 14% increment on the minimum wages which was received with a lot of jubilation by the workers who fall under this category and their union representatives. Four months down the line, I feel this was a slap in the face of the workers considering the recent changes in the taxation regime of the current government. I am cognizant of the fact that taxation is the primary source of revenue for the government but for a nation where 40% of the population is unemployed and the greater part of the 60% who are employed are on the minimum wage, the increasing tax burden could lead to some undesirable outcomes for the government.

Let me use the example of an average Kenyan worker who is solely dependently on his salary understand the various taxes that s/he has to pay even before s/he starts spending the money on his/her personal needs. The first order of business is to deduct PAYE from the salary – with the new minimum wage increment almost all employees in the formal sector are now eligible to pay PAYE. Most employers process salaries of their workers through the bank; the employee has then to pay 10% excise duty on all banking charges. From the bank, the employee rushes to his/her landlord to pay the monthly rent which some unscrupulous landlords have increased by more than 16% since the government started enforcing the law on taxation of rental income. The next stop is the supermarket where the monthly bill is expected to have gone up by more than 16% due to the enforcement of the new VAT Act. It is not even 10th but as the employee leaves the supermarket s/he is already searching his brains on how s/he will take care of his/her needs for the rest of the month. Mindless of the agonies the wanainchi are going through, various government agencies are already plotting to have NSSF contributions increased to 6% of a workers monthly earnings and the NHIF contributions increased by more than 100% of the current contributions.

I know the government has to seek revenue from all avenues in order to meet its recurrent and development expenditures but it also needs to listen to the concerns of its citizenry otherwise it will soon have a food revolution on its hands. Going by the look of things, the only motivation to employment will be to avoid idleness and not the monetary gain.