Civil servants’ unions have threatened to stage a nationwide strike if the government proceeds with its plan to deduct three percent of their salaries as mandatory contributions to the housing fund.
They said the tax, as proposed in the Finance Bill, 2023, will further shrink payslips for employees who are already struggling with the high cost of living.
Kenya University Staff Union Secretary-General Charles Mukhwana said the new levy will overburden workers in the public sector whose salaries have stagnated over the years despite a rise in the cost of living.
“The ... authorities continue to overburden workers in the public sector, whose salaries are deducted at source, while doing very little to net those employed in the private sector,” said Dr Mukhwana.
“This over-taxation is going on unabated despite the fact that an employee's salary is protected by law and that any deduction [on salaries] can only be by mutual consent or through negotiation by workers' representatives. We demand that Parliament rejects the proposed amendments in the Finance Bill, 2023 failing which the public sector trade unions will consider industrial action and other measures provided for under law,” he added.
He argued that the housing fund levy has been made mandatory yet was “purported to be voluntary” and will see “total deductions of 52 percent of one's monthly earnings with the remaining net of 48 percent still subjected to 16 percent value added tax for every purchase of goods and services whose prices are ever increasing.”
“This will leave most employees ... unable to afford basic commodities. The high cost of living makes a public service employee a slave who cannot afford a decent life. We are gravely concerned that we, the workers' representatives, have not been consulted on any of these levies, which is a violation of the Constitution,” Dr Mukhwana said.
Universities Academic Staff Union Secretary-General Constantine Wasonga said the new levy amounts to over-taxation.
“The Kenya Kwanza government ... started with NSSF [National Social Security Fund], then proposed a 2.75 percent increase on NHIF [National Health Insurance Fund]. But the services we are getting are not commensurate with what we are paying. The government is now proposing a three percent deduction for the housing levy, which our members do not want,” said Dr Wasonga.
Kenya Medical Practitioners Pharmacist and Dentists Union (KMPDU) Secretary-General Davji Bhimji lamented that doctors will see over Sh20,000 docked from their basic salaries.
This, Dr Bhimji pointed out, is even as the Ministry of Health continues to withhold over Sh2 billion in remuneration as stipulated under a collective bargaining agreement signed in 2017, while medical interns employed in January remain unpaid.
“We are expecting an 80 percent salary increment based on the period of stagnation and high inflation. But, where our salaries are [deducted] and where such deductions are undertaken without consultations, it is clearly daylight robbery.”
“We are now at 52 percent. What will make it not to climb to 70 percent next year? And what will stop them from making us work for free because the government is broke and we are [supposed to be] patriotic? We are telling the government to stop raiding our payslips. It is non-negotiable, it is wrong and can only be pushed back with the strongest labour strike ever seen,” he said.
Besides demanding for parliament to reject the proposed amendments in the finance bill 2023, the unions have also demanded that the government reduces taxes imposed on workers, and engage worker’s representatives in the Public Service Sector to char the way forward. They have also demanded that the government fast-track negotiations and implementation of all pending Collective Bargaining Agreements (CBAS).
“We want to announce that before we give notice for strike, we will march and proceed to parliament on the week of 25th and present a petition that the parliament should stand with workers and ensure that unnecessary taxes are not put on our pay slips. If they do not do their jobs, we will proceed on industrial action,” he concluded.
Also proposed is an increase in pay-as-you-earn rates from 30 to 35 percent for workers earning Sh500,000 and above per month and a 15 percent withholding tax on payments related to monetisation of digital content.