Kenya needs to enhance tax deductions on new NSSF contributions

NAIROBI, KENYA: On June 1, Kenyans woke up to the reality that their pension contributions to National Social Security Fund (NSSF) this month will be increased from Sh200 a month to 6 per cent of their total monthly income. This is subject to a set upper limit.

In the first year of implementation, 6 per cent NSSF contribution will be capped at Sh1,080 but the amount is expected to increase significantly over the next five years. The employer will be required to match employee contributions to the NSSF. The enhanced pension contributions are welcome especially in light of high inflation that has continued to erode real value of benefits received from NSSF, which means an employee’s retirement package is dealt a significant blow, and therefore the need to protect our people upon retirement.