Parliament must reject tax on pension
Friday, June 19, 2020 0:01
By JAINDI KISERO |
Most pension schemes are unable to guarantee a retiree even one tenth of the income that they used to earn when he was in employment.
FILE PHOTO | NMG
The idea of taxing the income and pensions of retirees is a poignant illustration of the arrogance of power by mandarins who design and craft tax policy.
In April, the Treasury introduced amendments in which it sought to remove tax exemption status on the following: First, investment income of retirement schemes; second, investment income of the National Social Security Fund (NSSF); and thirdly, pension benefits for citizens above 65 years.
The proposals in the new Bill are as follows: First, remove the tax exemption status of the NSSF; secondly, remove tax exemptions on retirees above 65 years of age; and thirdly, remove exemptions on overtime and retirement benefits for Kenyans earning the minimum wage.
We live in a society where the majority of retirees are without a secure and reliable source of retirement income, where contributions to pension schemes are not aligned and have no bearing on old-age income and where pensions are not indexed to inflation.
