After years of financial mismanagement and high-level corruption in the 1990s, Kenya had a semblance of sanity at the onset of the multi-party era.

Kenyan President, Emilio Mwai Kibaki, an internationally renowned economist, appointed knowledgeable and well-exposed individuals to strategic government positions, and the citizenry went calm. Children attended school without the unnecessary disruptions mostly caused by fee demands, and parents were able to plan their income, even when modest.

Today, the desperation of the average Kenyan is felt across all demographics: the young and old, and the white and blue-collar workers alike. It is felt by those living below the poverty line, up to those driving high-end vehicles. Reason?

Not only has people’s disposable income gone down massively, but planning for tomorrow is becoming almost impossible for those who earn an honest living. This week, the Kenya Revenue Authority announced changes to how tax returns are to be filed. Probably the reason this announcement has made the average Kenyan uncomfortable is that they have not yet settled into the new financial reality created by the Finance Act 2023 and the 2024 amendments to the Tax Laws.

A significant number of salaried earners already have part of their income taxed at 32.5% or 35%! Historically, such percentages were considered too high even for corporations.  

Then there is the 1.5% housing levy on gross remuneration that the government demands from both the employee and employer, even if the employee is already servicing a mortgage, or the employer is paying staff house allowances.

Fuel, whose prices affect every sector of the economy, is now taxed at 16%, double what it used to be: petrol, diesel, and paraffin.

 

However, it is a relief that LPG (Liquefied Petroleum Gas) remains exempt from tax. Still, amid all the discomforting ad hoc changes, Kenyans can only hold onto hope that the government will leave LPG and other basic commodities untaxed. After all, even Rome was not built in a day – and Kenya will not be either.