Teachers’ August payslip. Starting this month, salaried employees are expecting less pay. This is after the decision by the court of appeal to allow the implementation of the finance act. This decision therefore saw the government backdate all imposed taxes to July 1st.
The court of appeal on Friday 28th July lifted the conservatory orders baring the act’s implementation. It therefore allowed the Kenya Revenue Authority (kra) to collect new taxes in an attempt to raising an extra ksh211 billion in this financial year.
This therefore implies that the new taxes will be effected at the end of this month together with the mandatory housing levy as well as PAYE for high income individuals.
In addition, there is a 16% VAT on petroleum products, export and investment promotion levy.
This is how your payslip will be affected according to kenyans.co.ke
What is the meaning of backdating taxes?
In an attempt to backdate the taxes, a retrospective application will be applied by the taxman. This therefore means that that July deficit will be collected from this month’s payroll.
The housing levy requires both the employer and the employee to contribute 1.5% of the employee’s gross monthly salary towards the program. This means that both the July and August housing levy will be deducted from this month’s pay.
Employees are therefore expecting a 3% deductions towards the affordable housing programme.
Aside from that, high earning individuals will be affected by the expanded PAYE which introduced 35% for those earning above ksh 800,000 and 32.5% for those earning between sh500,000 and sh800,000.
How far are we?
Omtatah moved to court seeking to block the implementation of this act. He claimed that it is a violation to the rights of Kenyans. The high court therefore issued orders suspending the implementation stating that it violates Kenyans’ rights.
However, the state under the leadership of Treasury CS Njuguna Ndung’u and the office of the attorney general seeked the lifting of the orders saying that this situation had brought a government crisis in relation to its efforts to raise revenue. The court of appeal ruled in their favour.
The petition will now be moved to a full trial and be head by the three selected judges.
Teachers’ August payslip.