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Cotu opposes housing tax

rotich

Treasury secretary Henry Rotich. FILE PHOTO | NMG

The Central Organisation of Trade Unions Kenya (Cotu) has rejected the National Housing Development Fund (NHDF) proposed in the 2018-2019 budget.

Cotu Secretary-General Francis Atwoli said National Treasury Cabinet Secretary Henry Rotich's proposal -- to amend Section 31 of the Employment Act 2007, to deduct 0.5 per cent of every employee’s earnings towards the fund -- is against the International Labour Organisation (ILO) Convention on protection of wages.

Mr Atwoli pointed out that though Mr Rotich plan seeks to create jobs and implement the Big Four agenda, the additional taxes would hurt workers.

He noted that the workers already have to dig deep into their pockets to meet the prevailing high cost of living.

“Cotu fully supports the position by Federation of Kenya Employers (FKE) to oppose the proposed amendment demanding an employer to contribute 0.5 per cent of the employee's gross monthly salary to the NHDF.

However, introducing another tax to fund President Uhuru Kenyatta's big four action plan will strain both employers and employees,” he said.

Irrational amendments

He added that both Cotu and FKE are cautioning the government to halt the irrational amendments through which the CS seeks to "drain and cripple poor workers", scaring away investors with arbitrary levies imposed on both workers and employers without consultation.

“While Cotu supports the presidential directive on the Big Four agenda particularly in the issue of housing, prior consultations are important to bring all involved on board, including workers who are now set to finance the agenda,” Mr Atwoli stated.

He said workers want clarity on how the NHDF will be run and who will be safeguarding the funds on behalf of the workers.

Besides, the contributing workers want an assurance that the funds will be used for the intended purpose and will not be a conduit for corruption, he said.