The Central Organization of Trade Unions (COTU) has advised the government to exercise caution when considering tax increases, claiming that they can be counterproductive.
COTU Secretary General Francis Atwoli issued a statement on Friday urging the government not to pass the Tax Laws (Amendment) (No. 2) Bill of 2020, which would repeal safeguards put in place by the government for salaried workers during the Covid-19 Pandemic.
“With only 2.5% of salaried Kenyans earning above 100,000 and a majority of about 80.5% earning below 50,000, it was insensitive for the Kenyan Government to introduce punitive tax measures at a time when many workers had lost employment as a result of the Pandemic,” Atwoli said.
“We called on KRA to embark on a radical exercise of collecting taxes from those Kenyans who have mastered the art of tax evasion and tax avoidance,” he added.
In the 2023 Budget Policy Statement, the government has suggested that it have access to and investigate MPESA-type mobile money transactions.
“The move by the current government is ill-advised and counterproductive. First, a majority of users of mobile banking are hustlers and the poor who overwhelmingly voted for this government. Second, this move will ultimately make Kenyans avoid using mobile money platforms and as a result, destroy a great innovation that has since helped ease the movement of money, especially from the urban to rural areas,” Atwoli said.
Instead of monitoring and investigating MPESA transactions, Atwoli urged the government to crack down on outsourcing companies and formalise many jobs in the informal sector.
“Very soon, Kenyans will start avoiding the use of mobile money platforms and, maybe, start using other platforms to send money like courier and parcel services. Instead. COTU (K) would like to invite the government to crack down on outsourcing companies whilst formalizing many jobs in the informal sector,’ Atwoli said.
He stated that the government should ensure that the more than 5,000 outsourcing companies regularise their employees’ employment terms and conditions of work by ensuring that all statutory deductions, such as PAYE, NSSF, and NHIF, are paid.
