Atwoli speaks after KRA announces changes on workers’ payslips

The Central Organization of Trade Unions boss Francis Atwoli has issued a statement following the decision of the Kenya Revenue Authority (KRA) to effect sweeping changes on the payslips of salaried workers.

On Thursday, December 19, 2024, KRA stated that it would no longer include the Social Health Insurance Fund (SHIF) Housing Levy and post-retirement medical funds deductions in computing the Pay as You Earn (PAYE) tax beginning this December.

In a statement on Friday, December 20, 2024, Atwoli hailed the decision, noting that it would provide relief to salaried workers who have borne the burden of double taxation.

Double taxation

“The Central Organization of Trade Unions (Kenya), COTU (K), on behalf of Kenyan workers, wishes to express its appreciation to President William Ruto for listening to the concerns raised by COTU (K) and granting Kenyan workers tax relief on the Housing Levy and the Social Health Insurance Fund.  This timely intervention, as announced yesterday by the Kenya Revenue Authority, will significantly ease the financial burden on salaried workers who have in the past borne the weight of double taxation,” Atwoli said.

The long-serving workers’ boss revealed that his organization had brought to the attention of Ruto the double taxation which was being borne by workers and had requested for change.

“Following constructive engagement with the President, anchored on the principles of Social Dialogue, COTU (K) brought to the attention of Ruto that Kenyan workers were being subjected to double taxation considering the deductions for the Housing Levy and Social Health Insurance Fund were subjected to Pay As You Earn (PAYE).   This practice had been eroding workers’ disposable income and reducing their take-home pay, leaving them with less to meet their day-to-day demands. This move is a welcomed relief for Kenyan workers, as it translates to better-looking payslips and frees up additional income, thereby boosting their ability to provide for their families and contribute to the economy,” he added.

Mortgage interest

KRA equally noted that mortgage interests of up to Ksh30,000 per month would not be included in the amount deductible in the computation of PAYE, as well as contributions made to a registered pension or provident fund or a registered individual retirement fund up to a limit of Ksh360,000 a year or Ksh30,000 per month.

“Kenya Revenue Authority (KRA) informs employers and the public that pursuant to the Tax Laws (Amendment) Act, 2024 which comes into force on 27th December 2024, the following changes shall be applicable in the computation of PAYE for December 2024 and subsequent periods,” the introductory part of the KRA’s public notice read.