COTU: It is insensitive of Gov’t to introduce punitive tax measures
The Central Organisation of Trade Unions (COTU) has lambasted the Government for ending tax relief measures that cushioned salaried workers in the wake of the Covid-19 pandemic.
COTU said it is insensitive of the government to introduce punitive tax measures at a time when many workers have lost employment –as a result of the pandemic– and are pondering on how to take their children back to school.
“….prices of household goods will go up considering that VAT) will return to 16% from 14%; the corporate income tax will increase from 25% to 30% and much more disturbing and hurting is the fact that salaried workers earning above Ksh. 32,333 will pay a maximum of 30% as PAYE tax…” COTU said in a statement.
President Uhuru Kenyatta signed the Tax Laws (Amendment) (No.2) Bill of 2020 into law last week and it will be effective starting January 1, 2021.
The Francis Atwoli-led union lamented that only 2.5% of salaried Kenyans earn above Ksh.100,000 and a majority of about 80.5% earn below 50,000 yet they are the ones who will bear the brunt.
“As much as we understand that the government is struggling to balance between saving the economy and surviving through the pandemic (including the health crisis), we believe that there are alternative ways the government can use to meet its obligations without being insensitive to the working poor,” the statement adds.
COTU expressed its opposition of the government move saying Kenyan workers, like others globally, are struggling to make ends meet and the government should spare its citizens any provocation through punitive tax measures.
According to the union, the government should be reminded that the reasons for which they gave these tax incentives in April are as valid today as they were then, if not more.
“By reversing these measures are they saying that, as a country, we have conquered the Covid-19 pandemic? What is it that has changed since April to convince the government that Kenyans are out of the woods and that these tax measures won’t be burdensome? What are the indicators government is using?” COTU posed.
The union has demanded that the National Treasury advise Parliament and the Executive on other alternative measures it can employ in order to sustain the economy.
COTU averred that the government must not impose unreasonable taxes to a population ravaged by Covid-19.
“Let Treasury learn how to balance between providing services to Kenyans with the same taxes and burdening Kenyans in the process of collection of these taxes. The Government of Kenya should not overburden its citizens, especially during these hard times,” the statement reads.
COTU, that represents over four million workers in Kenya, criticized the government saying the government must stop spending on unnecessary projects that have no immediate requirement.
On collection of taxes, the union urged the Kenya Revenue Authority to target Kenyans who avoid payment.
“KRA MUST stop and think of innovative ways of tax collection. Especially from those who don’t pay taxes. This is not the first time KRA has missed its revenue collection target. Therefore, they should stop using Covid-19 as a scapegoat. They should innovate and increase their efficiency,” COTU said.