Nairobi, June 5, 2020: Measures by the Kenyan government to introduce taxation on pensions as a way out of financial holes created by the Covid-19 pandemic is unacceptable, according to HelpAge International and partners campaigning for older people’s rights.
This is the first time in Kenya’s national history that the government has proposed taxing pensions.
“This is ageism and discriminates against older people. The timing of these new tax laws is bad, falling at a time when the government is very well aware that the public may not participate in shaping or even opposing their agenda,” said Erastus Maina, Kenya Country Programme Manager at HelpAge International.
Elijah Mwega, chairman of the Older People Forum Nairobi and KARIKA, a HelpAge Network member, pointed out that older people get very little income from their pension and that many of them use it to help manage prevailing medical conditions.
“The money people receive from their pension barely meets their daily needs, let alone taking into account the many individuals they often have to care for and support in extended families, like orphaned grandchildren,” said Elijah Mwega.
“Deducting tax from pensions will push many older people deeper into poverty. The government must find other avenues to look for money to meet its current budgetary challenges.”
Agnes Kariuki, Coordinator at Kibera Day Care, a HelpAge Partner in Nairobi’s Kibera slum, said that taxing the pension of someone who receives USD20 or less in a month is not only inhuman, it is discriminatory.
According to HelpAge International, many are barely supported by the low pension, having spent their working years in institutions that do not pay well and where they had no chance of making any savings.
“We have been engaging with the government to increase all forms of pension, including the universal social pension, to afford beneficiaries some decency. The mere thought of deducting money from older people’s pension is a brutal negation of our engagement with them,” said Agnes Kariuki.
According to Elijah Maina, the new taxation on pensions will counter all the positive moves made by the government when they introduced the universal social pension in 2018 to support older people over the age of 71.
“It is like the government will be giving older people money with one hand while taking it away with the other. It is an injustice to take money from older people. It looks like the government wants to supplement its financial shortfall just because the economic situation in the country is so dire due to COVID-19,” he said.
Ukur Yatani, Kenya’s Cabinet Secretary for Treasury was quoted in the press this week saying that pension payments have continued to pile pressure on the government despite a knee-jerk policy decision nine years ago to raise the retirement age in public service from 55 to 60.
According to the Treasury, retirees’ payroll hit a record Sh71.84 billion between July 2019 and April 2020, a growth of 36.44 percent or Sh19.19 billion, compared to the same period the previous year, largely because of the rapidly ageing workforce in the public service.
HelpAge International is a global network of organisations promoting the right of all older people to lead dignified, healthy and secure lives.
Their mission is to promote the wellbeing and inclusion of older women and men, and to reduce poverty and discrimination in later life.