H.E. President William Ruto recently addressed the American Chamber of Commerce Regional Business Summit, where he spoke about Kenya’s economy and the government’s plans to support business growth in the country.

One of the key themes of the speech was the importance of Small and Medium-sized Enterprises (SMEs) to Kenya’s economy. The President noted that SMEs account for 80% of employment in the country and announced the government’s commitment to providing financial support and regulatory reforms to help SMEs grow and succeed. This is a crucial step towards creating more jobs and promoting economic development across the country.

 Here are some of the key highlights from his speech to look out for in the 2023 budget:

– VAT on exported services will be removed in the Finance Bill, in the coming budget, in June 2023.

 

– The government of Kenya will making a policy shift and effective June 2023, all verified tax refund claims will be payable within six months. If for whatever reason a refund is not made by the Kenya Revenue Authority (KRA) within this period, the taxpayer can offset their claim against future tax liability, without further application to KRA.

 

– The government will exempt startup companies from paying taxes on such unrealised gains on employee-allocated shares starting 1st July 2023.

 

– The government will review the Special Economic Zones and Export Processing Zones laws to remove impediments to attracting new local and foreign investments. The raft of amendments are under stakeholder consultations and will be in place by 1st July 2023.

In conclusion, President Ruto’s speech at the American Chamber of Commerce Regional Business Summit highlighted the government’s commitment to supporting business growth and economic development in Kenya. His emphasis on SMEs, infrastructure development, and youth empowerment demonstrate the government’s focus on creating a more inclusive and prosperous economy for all Kenyans.

The National Social Security Fund (NSSF) in Kenya has announced new contribution rates that will take effect from April 2023. The changes were announced by the Cabinet Secretary for Labour and Social Protection, Hon. Simon Chelugui, and are aimed at ensuring that the fund remains sustainable and able to provide adequate benefits to its members.  The new rates are set to increase the amount that employees and employers contribute to the NSSF.

 Under the new rates, the employee contribution rate will increase from 6% to 7% of their gross monthly salary. The employer contribution rate will also increase from 6% to 8% of their employee’s gross monthly salary. This means that the total contribution to the NSSF will increase from 12% to 15% of the employee’s gross monthly salary.

 The new NSSF contribution rates are as follows:

For employees:

• Those earning a monthly basic salary of up to Kshs 6,000 will contribute 6% of their basic salary to the NSSF.
• Those earning a monthly basic salary of between Kshs 6,001 and Kshs 18,000 will contribute Kshs 360 to the NSSF.
• Those earning a monthly basic salary of more than Kshs 18,000 will contribute 12% of their basic salary to the NSSF.

For employers:

• Employers will contribute 6% of their employees’ monthly basic salary to the NSSF.

It is important to note that the NSSF is mandatory for all employees in Kenya, regardless of their age or income level. The fund is designed to provide a safety net for workers in the event of retirement, disability, or death. The new rates will apply to all members of the fund, including those who are currently contributing.

The government says that the new rates are aimed at improving the benefits that Kenyan workers receive from the NSSF. The NSSF provides a range of social security benefits, including retirement benefits such as pensions, disability benefits, survivor benefits, and emigration benefits. These benefits are designed to provide a safety net for Kenyan workers and their families in times of need.

The new rates are expected to increase the amount of money that is available to the NSSF, which will enable the agency to provide more comprehensive and effective social security benefits to Kenyan workers. The government has also stated that the new rates will help to ensure the long-term sustainability of the NSSF.

While some Kenyan workers may be concerned about the impact of the new rates on their take-home pay due to the tough economic times, it is important to remember that the NSSF benefits are a crucial part of the social safety net for Kenyan workers. By contributing to the NSSF, workers are investing in their own future and that of their families

In conclusion, the new NSSF contribution rates in Kenya are aimed at ensuring that the fund remains sustainable and able to provide adequate benefits to its members. The increase in contributions will enable the fund to improve its investment returns, reduce administrative costs, and provide better benefits to its members.