Pension
Pension

Kenya should abolish taxation on monthly pension for senior citizens to shield them from financial hardships amid vulnerability to COVID-19 pandemic and other health challenges, campaigners said on Friday.

Erastus Maina, Kenyan Country program manager at the international charity, HelpAge International, said the government should not introduce taxation on pensions and other safety nets for older persons given their vulnerability to poverty and chronic ailments.

“Tax exemption on pensions is key to protecting older persons from economic hardships that have worsened against a backdrop of COVID-19 pandemic,” Maina said in a statement issued in Nairobi.

He said that taxing monthly pension for senior citizens could reverse gains made since the introduction of social safety nets to cushion this demographic from deprivation and neglect.

Ukur Yatani, cabinet secretary for National Treasury, said recently that the government was considering modest taxation on pension bill for retirees that was exerting pressure on public coffers.

Yatani said that taxing monthly pension for a rapidly aging working force will help the government plug budgetary shortfalls occasioned by COVID-19 disruptions to the economy.

Maina said the government should look for creative ways to manage the ballooning pension bill as opposed to taxation to ensure that older persons have access to adequate funds to cater for basic needs like shelter and healthcare.

“The State should prioritize tax waiver on monthly pensions that have made a tremendous impact on the lives of senior citizens in this country,” said Maina, adding that streamlining the management of pension funds is key to averting waste.

Elijah Mwega, chairman of Nairobi based community-based organization, Older People’s Forum, said that taxing monthly pension could impact negatively on livelihoods of senior citizens, the majority of whom shoulder the responsibility of caring for the extended family.

“Deducting tax from pensions will push many older people deeper into poverty. The government must find another avenue to look for funds to meet its current budgetary needs,” said Mwega.

Agnes Kariuki, coordinator of a daycare center for older people based in Nairobi’s Kibera slums, said that campaigners had commenced dialogue with the government to halt taxation on their monthly stipends. Enditem

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