Employees Earning Less Than Ksh40,000 May Face Higher Taxes Under New Finance Bill Proposal
MPs during a session in parliament. Image file
In Summary:
Proposed amendment to the Income Tax Act could increase taxes for employees earning less than Ksh40,000 monthly.
Deloitte urges Parliament to reject the proposal, citing higher administrative costs for employers.
Employees in Kenya earning less than Ksh40,000 per month may face higher taxes if the proposed amendments to the Income Tax Act in the Finance Bill, 2024 are approved.
The bill aims to change the non-taxable limit for allowances related to subsistence, travel, entertainment, and other expenses from a fixed daily rate to 5% of gross earnings.
Currently, the non-taxable limit is set at Ksh2,000 per day. Under the new proposal, employees earning Ksh30,000 per month, for instance, would see their non-taxabl...