Inside Politics

Relief for KQ staff as MPs grant Yatani’s tax request

Friday, October 8th, 2021 00:05 |
National Treasury Cabinet Secretary Ukur Yatani.

National Treasury Cabinet Secretary Ukur Yatani will now exempt 187 employees of Kenya Airways from paying income tax on their send off package after lawmakers approved his request yesterday.

The send-off package, which will now be exempted, amounts to three months’ salary paid in lieu of notice, severance pay and payments for accumulated leave due to them.

Lawmakers unanimously approved a report by the committee on delegated legislation chaired by Tiaty MP William Kamket that approved the request by Yatani to have the employees exempted from the said taxes.

While moving the report, Kamket  who said that the exemption would make the employees leave in a dignified manner added that the move will also have an effect on the performance of Kenya Airways.

He said more staff were likely to be incentivised into voluntary retrenchment as this would imply a reasonable income to enable them sustain themselves following the retrenchment.

In addition, he said that the exemption will help Kenya Airways reduce its cost of operations which may have an effect on the improved solvency status and sustained financial performance of the airline.

“This House adopts the Report of the Committee on Delegated Legislation on its consideration of the Income Tax Exemption on the Send-off Package payable to employees of the Kenya Airways Plc, 2021, laid on the Table of the House on Wednesday, September 29, 2021,” said Kamket.

He added: “ This is a positive move to help Kenyans who are retrenched get a good send off and the law allows CS Treasury to have such exemptions made,” he said.

Leader of Majority Amos Kimunya who also contributed to the motion said there is need for the employees to be given a decent send off to cushion them from the effects of Covid-19.

“I rise to support the committee on this matter, it is an emotive matter, Covid-19 has disorganised the way the industry has been operating. KQ was already in a bad situation and therefore staff who were affected in terms of reduced incomes and allowances deserve this package to cushion them in these difficult times,” he said.

Voluntary retirement

Gilgil MP Martha Wangari supported the request, saying this will motivate other employees to take up such packages whenever there is voluntary retirement.

“As a committee we were totally convinced that it is the right thing to do. We are in agreement that there are also Kenyans who deserve this and to encourage other government employees so that this can send a positive queue so that they can voluntarily take up such packages,” she said.

The move by the house comes after Yatani in his request said that the tax exemption will facilitate the cash-strapped Kenya Airways Ltd to reduce the cost of sustaining redundant staff following reduced business due to the effects of Covid-19 pandemic and other factors.

Yatani also explained that the exemption, which is coming during the Covid-19 pandemic, will encourage more staff to take part in the voluntary retrenchment which is part of a turnaround programme the airline adopted since 2019 to be able to rescue the sector from collapsing by reducing the cost of operations.

Once given the send-off package, Yatani said the retrenched employees will not be re-employed by Kenya Airways in any capacity and under any terms before the expiry of five years from the date of retrenchment.

He added that the airline will be required to furnish Kenya Revenue Authority with names of the retrenched employees, the date they left service, amount paid to each of them and a copy of the letter confirming the retrenchment.

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