James Mburu, the Kenya Revenue Authority commissioner-general. FILE PHOTO | NMG
Payroll taxes for the year ended June rose at the slowest pace
in three years, pulled back by sluggish growth in new jobs and near
stagnant salaries in corporate Kenya.
The Kenya Revenue
Authority (KRA) says Pay-As-You-Earn (PAYE) collections in the year
ended June 2019 expanded 7.9 per cent, without giving actual numbers.
This was slower compared to the 15 per cent rise in payroll tax in the year to June 2018 and nine per cent a year earlier.
Key
firms have put on hold hiring of new staff in an economy that has also
witnessed a string of job losses in recent months affecting nearly all
sectors.
Reduced profitability in corporate Kenya,
which is underlined by a record number of firms listed on the Nairobi
bourse issuing profit warnings, has also hurt income tax collections.
Kenya’s economic growth slowed to 5.6 per cent in the first
quarter of this year compared with the same period last year, when it
was 6.5 per cent, due to dry weather which stiffled the farming
sector—which contributes about a third of output.
Employees
who registered for payroll taxes increased by a modest 4.5 per cent,
KRA commissioner-general James Mburu says in the annual revenue
statement for the financial year 2018-19.
“PAYE growth
was driven by the public sector, which registered a cumulative growth of
8.9 per cent, driven by upscaling of salaries in the education sector,”
Mr Mburu says, an indication of muted jobs and pay growth in the
corporate sector.
Collections from PAYE, an indicator
of growth in jobs in the formal sector, were estimated at Sh378.33
billion compared with Sh350.631 b
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