Treasury Cabinet Secretary John Mbadi has come to the defense of the government’s tax policies, asserting that they are not as onerous as critics claim, particularly for those in the middle-income bracket.
Mbadi, a prominent figure in the ODM party who was appointed by President William Ruto, rejected accusations of excessive taxation as a misleading narrative.
“There’s a perception that we are overtaxing. I’ve examined the tax structure while looking for ways to improve payslips,” the CS explained.
In a comprehensive presentation shared with the Star, Mbadi outlined the tax implications for individuals earning Sh60,000 monthly, a salary level often linked to Kenya’s middle class.
This presentation, which addressed the economic situation, was delivered to Members of Parliament during the National Assembly Mid-Term Retreat in Naivasha. Mbadi argued that the introduction of the Housing Levy and the Social Health Insurance Fund has been inaccurately portrayed as heavy taxation.
“For someone earning Sh60,000, the extra taxes include the Housing Levy at 1.5% and the SHA at 2.75%. Together, that totals 4.25%, which amounts to Sh2,550,” he clarified.
He further noted that without these deductions, individuals would have faced a 30% tax on their income.
“The individuals most affected by these taxes are those earning what some might call super-salaries, but when you break it down, it doesn’t seem so excessive. The middle class is not as impacted,” he added.
With the new adjustments, 30% of income is retained, and the only deduction is 70% of the Sh2,550, equating to Sh1,785.
Mbadi drew a comparison to the previous National Hospital Insurance Fund contributions, where individuals earning Sh60,000 paid Sh1,700 each month.
“When you subtract that from Sh1,785, you’re only paying Sh85 more. Is that really over-taxation?” he questioned.
The Finance Minister’s comments come at a time of increasing public frustration regarding the rising cost of living and higher salary deductions.
