Former Deputy President Rigathi Gachagua speaks during a media briefing to assess the Kenya Kwanza administration’s four years in office/SCREENGRABFormer Deputy President Rigathi Gachagua has called on the government to introduce measures aimed at increasing the net income of Kenyan workers.
Speaking during a media briefing to assess the Kenya Kwanza administration’s four years in office, on Tuesday at DCP headquarters, Gachagua called for the suspension of the Affordable Housing Levy and a review of PAYE tax bands to cushion workers from the rising cost of living.
“Once again, I call on this government to cushion the payslip by suspending the Affordable Housing Levy and reducing the PAYE tax bands,” Gachagua said.
He said the measures, together with a review of the petroleum pricing framework, would leave Kenyans with more money to spend and help ease pressure on households.
“This, together with the review of the petroleum price framework, will give Kenyans increased net income,” he said.
Gachagua said he considered the tax burden to be among the major factors contributing to the high cost of living, arguing that workers were losing a significant portion of their earnings to taxes and other statutory deductions.
“A punitive and unpredictable tax regime is one of the principal causes of the high cost of living,” he said.
Gachagua claimed that the average Kenyan worker loses between 45 and 50 per cent of their monthly earnings through taxes and other levies, reducing the amount available to households as disposable income.
He cited the example of a teacher earning Sh50,000 a month to illustrate what he described as the declining purchasing power of Kenyan workers.
“For example, a teacher in Wajir earning a gross salary of Sh50,000 in 2022 took home approximately Sh42,000. Today, the same teacher takes home Sh38,000 while facing substantially higher food, fuel and transport costs, reduced school capitation and increased challenges in accessing healthcare,” Gachagua said.
Gachagua said the example demonstrated what he described as the impact of increased taxation on workers’ disposable income.
He argued that the government was leaving Kenyans with less money to meet their daily needs and called for policies that would increase workers’ take-home pay rather than add to their financial burden.
Gachagua said reducing PAYE rates, suspending the housing levy and reviewing the petroleum pricing framework would provide relief to workers and increase their disposable income.
