COTU welcomes directive on tax waiver

Central Organisation of Trade Union (COTU) Secretary General Francis Atwoli has applauded President Uhuru Kenyatta’s tax waiver on overtime, bonuses and retirement benefits for low income workers.

Atwoli said workers have suffered heavy taxation since 1994, adding that they will now enjoy a huge reprieve on their monthly as well as terminal benefits from the tax man.

“COTU considers the President’s directive a great offer and reward to the Kenyan workers who will now enjoy a huge reprieve on their monthly as well as terminal benefits from the tax man and it will go a long way in improving their welfare as well as cushioning them from growing harsh economic realities on inflation among others,” read the statement in part.

In the statement Atwoli, urged the President to consider conducting a total review of minimum wage in the 2016-2017 financial year.

During Labour Day celebrations last week at Uhuru Park, Atwoli appealed to the government to consider cushioning the minimum wage earners with a wage increment as well as consider reviewing the burden of taxes on the Kenyan workers.

“As workers, we are delighted since the move attests to President Kenyatta’s commitment to the betterment of the Kenyan workers who will no doubt reciprocate this rare gesture coming soon after we celebrated our 51^st International Labour Day. We appeal to employers to consider COTU (K) as their social partner not an enemy,” said Atwoli in the statement.

On Friday, President Kenyatta instructed the National Treasury to waive taxation on payments of bonuses, overtime and retirement benefits for low-income earners.

The President said his directive was part of the conscious drive to continually strive to improve the living standards of Kenyans and has instructed the National Treasury to include in the 2016 Finance Bill sustainable measures for its implementation.

The President, however, said that the taxation adjustment should be done in a manner that does not cause the cost of employment to increase.

“This will be done in a manner that does not place an additional burden on employers, or increase the cost of employment,” said President Kenyatta.