MPs & Civil Servants to be Exempted From Income Tax Charged on Private Sector Employees

𝐅𝐫𝐢𝐝𝐚𝐲, 𝐃𝐞𝐜𝐞𝐦𝐛𝐞𝐫 𝟔, 𝟐𝟎𝟐𝟒

Public servants, including MPs, may soon enjoy tax-free reimbursements for work expenses if President William Ruto signs the Tax (Laws) Amendment Bill. The Business Daily reports that this change could exempt reimbursements for official expenses, including asset purchases.  The Bill, passed in Parliament, allows untaxed reimbursements for official expenses which would increase public officers’ income. Critics warn this move could strain government finances by worsening the already high public wage bill of Ksh1.17 trillion in 2023/24, particularly as similar private-sector benefits remain taxable.

Parliament has rejected a proposal by the National Treasury to impose a 5% withholding tax on interest earned from new infrastructure bonds to preserve their attractiveness to investors. As reported by The Business Daily, the Finance and National Planning Committee made the decision following stakeholder concerns that taxing these securities could reduce investor interest. Infrastructure bonds, which have been oversubscribed in recent issuances, remain tax-free, unlike other government debt securities. The government had aimed to raise Ksh13.4 billion annually from the proposed tax. These bonds, introduced in 2009, are a key tool for funding infrastructure projects like roads and electricity. 

The Standard reports that County Governments  have accumulated Ksh168.62 billion in pending bills this fiscal quarter—Ksh129.15 billion for recurrent expenses and Ksh34.47 billion for development.The bills are owed to suppliers, contractors, and service providers for goods, works, or services already delivered. Nairobi led with Ksh121.06 billion in pending bills, followed by Garissa (Ksh6.07 billion) and Kiambu (Ksh5.90 billion). Challenges such as delays in revenue disbursements, underperformance in local revenue collection, and late submission of budget documents hindered fiscal management. Controller of Budget Margaret Nyakangó urged counties to improve revenue collection and timely submissions to address these inefficiencies. 

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The government has temporarily lifted a ban on the sale and export of raw macadamia nuts, allowing a 30-day window for licensed exporters to clear verified stocks. In a report by Capital News, agriculture Cabinet Secretary Andrew Karanja said the move is aimed at addressing urgent export needs of raw macadamia stocks held by processors. Kenya, the world’s third-largest macadamia exporter after South Africa and Australia, had imposed the ban last month but reversed it following assessments by the Agriculture and Food Authority. The directive allows for the export of raw (in-shell) macadamia nuts until the end of the 30-day period.

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A new report by Controller of Budget Margaret Nyakangó reveals that county governments spent only Ksh6.71 billion on development in the first quarter of FY 2024/25, representing just 3% of the annual development budget of Ksh203.55 billion. Shockingly, 10 counties, including Nairobi, Uasin Gishu, and Kisii, recorded no development spending during this period, instead directing funds towards salaries and recurrent expenses. The Standard reports that generally, counties spent Ksh576.73 billion, with Ksh371.4 billion going to recurrent expenditures. This marks a decline from the 4% development budget absorption rate recorded in the same period last year. Kirinyaga and Busia counties were commended for achieving the highest absorption rates at 12%.

According to Citizen TV, the Ministry of Labour is recruiting 500 nannies and 600 motorcycle riders (boda boda) for job opportunities in Saudi Arabia and the United Arab Emirates (UAE) under a new labour export scheme. Labour Cabinet Secretary Alfred Mutua announced that a Saudi Arabian HR team is in Kenya to urgently hire 500 nannies, while UAE officials will be interviewing boda boda riders next week. The positions offer monthly pay of up to Ksh104,000 for boda boda riders and between Ksh41,000 to Ksh52,000 for nannies. Candidates applying for boda boda jobs will need to pay Ksh167,900 for fees, while nannies will pay Ksh13,500 for medical costs. This recruitment comes shortly after the government paused a mass job recruitment exercise to process previous candidates.

The Treasury has launched 1,236 projects worth Ksh8.1 billion under the Equalisation Fund to improve services in marginalised areas, as reported by Capital News. The projects, spanning education, water, and healthcare, will benefit 6 million Kenyans in 34 counties. Key initiatives include building 115 classrooms, installing 177 boreholes, creating 41 water pans, and setting up 176 health facilities, with 53 fully equipped. Treasury CS John Mbadi reaffirmed commitment to the fund despite fiscal challenges, noting Ksh900 million has already been disbursed, with plans to address arrears and complete the projects on schedule. The efforts align with the government’s “Bottom-Up” development strategy. 

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Nairobi Governor Johnson Sakaja has denied claims that Uhuru Park and Central Park are being leased to private entities, according to a report by The Star . Speaking from City Hall, Sakaja clarified that the county’s objective is to improve the parks by introducing new amenities like food stalls, children’s bouncing castles, and boat riding to enhance visitor experiences. He emphasised that Uhuru Park remains public property, with thousands visiting weekly to enjoy its facilities. These upgrades aim to align with global standards while ensuring the parks remain accessible to the public. Sakaja stressed that public interest is the top priority in these initiatives.