The Treasury has reintroduced a proposal to tax bonus of low-income earners despite Parliament rejecting a similar move barely a month ago.
Through the Finance Bill, 2020, it is set for debate this afternoon.
The Treasury is seeking to delete a paragraph exempting from taxation income from employment paid in the form of bonuses, overtime and retirement benefits to employees whose taxable employment income does not exceed the lowest tax band in the Finance Act, 2016.
The MPs had rejected a similar attempt to tax allowances and bonuses paid to low income earners that had been included in the Tax Laws (Amendment) Bill, 2020.
The National Assembly Standing Order 141(1) provides that a Bill can only be reintroduced in the next session or after the lapse of six months in the same session if it is rejected.
President Uhuru Kenyatta signed the Tax Laws (Amendment) Bill, 2020 into law on April 25.
The Tax Laws (Amendment) Act, 2020, mainly targets low-income earners since it includes a 100 per cent Pay As You Earn (Paye) tax relief for employees earning less than Sh28,000 per month.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
