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Atwoli warns increased taxes will lead to industrial strife

Central Organisation of Trade Unions (Cotu) has warned that the proposed tax increment in the 2018/19 financial year would open a floodgate to industrial action in the country.  

Secretary general Francis Atwoli said the budget statement, presented at the National Assembly on Thursday by Treasury Cabinet secretary Henry Rotich is bound to hit workers hard.   

On Thursday, Rotich presented a Sh3 trillion budget betting on a raft of taxes to deliver new development agenda for the country.   

But Atwoli faulted the plan to increase taxes especially the inspection fees to 12 per cent on imported medicines.   

“The further introduction of inspection duties of 25 per cent on imported medicines will make them unaffordable to  workers who are already overtaxed,” said Atwoli.

Atwoli also opposed the new tax increment on kerosene and petrol. “This will affect transport for workers as PSVs would immediately hike fares. The increase will also have spiral effects on the cost of production,” he said.   

“Failure by the government to cushion workers against these taxes will lead to confrontation from workers in demand for pay increases,” he warned.      

Meanwhile, senior citizens can now contribute for their medical cover after Rotich said he will introduce amendments to retirement benefits regulation.

Earlier this year, the National Health Insurance Fund (NHIF) launched a comprehensive in-patient and outpatient cover targeting retired civil servants as it continued to widen its net towards a universal health insurance cover.

The health insurer entered a memorandum of understanding with the Kenya Association of Retired Officers to establish a medical cover for the retirees that will range between Sh1 million and Sh2.5 million for inpatient and Sh100,000 to Sh350,000 for outpatient.

The CS said in 2016, the ministry introduced amendments to the Retirement Benefits (Individual Retirement Benefit Schemes) Regulations and the Retirement Benefits (Occupational Retirement Benefit Schemes) Regulations to provide for establishment of a medical fund into which members can contribute during their working life and the same be used to purchase medical cover upon retirement.

“I propose to introduce amendments to the same regulations to allow members who are unable to build medical funds during employment to utilise a portion of their retirement benefits for post-retirement medical cover. I further exempt the same fund from the retirement benefit levy to boost the member’s contribution,” the CS said.

He also proposed to amend the Retirement Benefits Act to enable the Authority intervene against employers who fail to remit such contributions. —Bernard Gitau & James Momanyi

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