PSC says its a crisis for civil servants over taxes on salaries

The Public Service Commission (PSC) has called for a review of the current taxes and levies, citing the cost of living that has seen prices of basic commodities go through the roof.

Appearing before the National Dialogue Committee (NADCO) on Monday, October 2, PSC chair Anthony Muchiri said the high cost of living had taken a toll on the mental health of many salaried Kenyans unable to meet their financial obligations.

This, Muchiri said, had resulted in low morale and poor performance within the public service.

The PSC boss told the committee that data held by the State Department of Public Service shows that 12,532 public officers sought psychosocial support in the financial year 2022/2023 as compared to 6,616 in the financial year 2018/2019, representing an increase of 84 per cent.

Further, the statistics show that out of 79,253 public officers 17,132 representing 21.62 per cent earn less than a third of their basic salary.

“Out of 31,892 officers in the prison service, 13,661 which is 42.83 per cent earn less than a third of their basic salary. In the disciplined services out of 106,667 officers 51,784 representing 48.5 per cent earn less than a third of their basic salary.

“This data paints a grim picture of the situation public officers are faced with as and when additional taxes and levies are introduced in their pay cheque,” Muchiri said.

According to the PSC chair, a majority of the civil servants are servicing mortgages either through the civil servants’ housing scheme or other non-public schemes, affecting their disposable income and their quality of life.

To cushion the workers and boost performance, the commission recommends either a review of the taxation regime, wage increase or exemption of levies for workers serving similar mortgages.

PSC also proposes a staggered implementation of the 1.5 per cent housing levy and a deduction of the housing levy from the basic salary rather than the gross pay.

“This would cushion employees from adverse effects of all-round increase in taxes and ensure that all employees are in as much as possible within the one-third net salary requirement.”

The commission also recommends a review of Value Added Tax (VAT) on petroleum products to reduce the cost of fuel which has a ripple effect on the cost of living.

PSC was invited to appear before the committee for oral presentations on the five agenda items forming the terms of the reference of the bipartisan talks team.

On the reconstitution of the Independent Electoral and Boundaries Commission (IEBC), the PSC chair said the institution should be restructured in a manner that makes it more effective, efficient and credible.

PSC said the restructuring of IEBC as an independent commission should be safeguarded from interference and influence from political party interests.

NADCO, which is co-chaired by Azimio la Umoja – One Kenya coalition co-principal Kalonzo Musyoka and National Assembly Majority Leader Kimani Ichung’wah, started receiving submissions from the public on September 22 after various groups sent memoranda on proposals they wanted to be considered during the talks aimed at ending the standoff between the Kenya Kwanza administration and the opposition.