Paid internship scheme for graduates begins in March

Politics and policy

Tuskys internship programme beneficiaries during the launch of its five-year initiative targeting 1,500 fresh college graduates annually last October. PHOTO | SALATON NJAU 

By NEVILLE OTUKI, notuki@ke.nationmedia.com

In Summary

• Companies that absorb at least 10 fresh graduates for six to 12 months will also get tax subsidies from the government.

Fresh graduates will start enjoying paid internship from next month under a government scheme aimed at preparing college leavers for the rigours of the labour market.

Under the scheme, firms that absorb at least 10 fresh graduates for six to 12 months will also get tax subsidies from the government.

The plan, which has delayed since last June, aims to boost employment in the private sector in a country grappling with high unemployment rates of about 40 per cent.

The public sector has gone slow on hiring to curb a ballooning wage bill.

“Rules and regulations that will govern the tax rebates are being finalised and should be ready by the end of this month,” said Treasury secretary Henry Rotich.

The minister in his Budget statement last June said companies that hire fresh graduates from colleges and universities will enjoy lower corporate tax — to allow employers recover their expenses on the interns.

They could, thereafter, decide to absorb them permanently, put them on contract or release them to the labour market.

Western countries often set the minimum pay for interns in a similar scheme. They also cap the tax subsidies enjoyed by hiring companies to cushion the government from forfeiting huge revenues in taxes.

READ: 400 graduates to be hired for State internships

Mr Rotich on Thursday declined to indicate the level of the tax subsidies to the companies. He had earlier given a range of between 30 per cent and 100 per cent.

“The interns are expected to get stipends to cover their expenses and something small for their upkeep in the training period,” Mr Rotich had said.
This comes as a big relief to the armies of fresh graduates most of whom are at a loss when starting out in their careers.

The government’s quest to curb its growing wage bill and the return of cost-cutting in the corporate sector has dented the ability of the economy to create employment.

Official data shows that the economy created 106,300 new formal jobs last year, down from 134,300 in 2013 or a 20.8 per cent drop.

Fresh graduates are generally viewed as unemployable because they lack specialised market skills and experience to perform tasks.

The Federation of Kenya Employers reckons that failure to grant fiscal incentives had slowed efforts to recruit and train thousands of graduates who join the labour market each year.