TSC News on salary. The government has made measures that could result in the elimination of personal relief for paid personnel beginning with the following fiscal year.
The idea is part of the Kenya Kwanza government’s draft medium-term revenue strategy for the financial years 2024–2025 and 2026–2027.
The government declares it will assess tax reliefs with a view to deleting any that are ineffective in the draft recommendations made public by Treasury.
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Currently, taxpayers benefit from personal, insurance, medical, housing, and disability-related relief as the government strives to develop a saving culture, increase the purchase of insurance policies, enhance home ownership, and reduce Kenyans’ tax burden.
TSC News on salary
“In addition, tax incentives increase the complexity of the tax system and reduces its effectiveness as an instrument to promote equity,” Treasury said.
It goes on to say that research has shown that tax breaks do not necessarily alter taxpayers’ behavior toward self-improvement activities like saving or mortgaging.
Individuals earning less than Sh24,000 per month (Sh288,000 per year) are still exempt from income tax.
The Income Tax Act establishes five tax brackets for personal income.
These are Sh0-Sh288,000 per year at a 10% rate; the next Sh100,000 per year at a 25% rate; the following Sh5,612,000 per year at a 30% rate; the next Sh3,600,000 per year at a 32.5 percent rate; and above Sh9,600,000 per year at a 35% rate.
TSC News on salary
Treasury stated that the Medium-Term Revenue Strategy aims to increase domestic revenue, which has been decreasing over time.
