Levy –Government has now come up with atleast three key changes that would help calm the taxation storm.
National Assembly Finance Committee, on Friday, June 9, proposed enacting a legal framework that will help safeguard the interests of contributors to the housing kitty which makes one of the William Ruto’s legacy projects.
With a clear and understandable roadmap, Kenya Kwanza administration is seeking totable convincing case on the Bill when its second reading takes place in Parliament.
Appearing before the Finance Committee, Housing Principal Secretary Charles Hinga intimated that the Ruto government had proposed two changes to the fund, including non-withdrawal of employer contributions and taxation of withdrawals.
PS Hinga indicated that the contributors could withdraw their salary deductions and those of their employers together after seven years.
“The employer portion can be withdrawn together with that of the employee at the earlier stage of seven years or retirement,” Hinga clarified in new changes.
He also stated that government will not be taxing any withdrawal made in seven years saying this process will be highly participatory.
“Withdrawal in seven years will now not be taxed. It’s a very participatory process,” Hinga explained debunking their earlier assertion that employer’s contribution remains in the fund for 14 years.
Contributors were also to be taxed when making withdrawals, with the government explaining that the levy was informed by the fact that the contribution would not be taxed at the salary deduction stage.
However, the government had indicated that those transferring their contributions to the retirement scheme would avoid taxation.
