Jubilee to consider raising taxes to payoff teachers
Kenyans are well advised to brace for significant raises in taxes as the government searches for Sh17 billion required to pay teachers.
Among the options being explored by technocrats at the Treasury is a possible increase of taxes to an already overtaxed citizenry.
Treasury Principal Secretary Kamau Thugge confirmed to the National Assembly Finance Committee on Tuesday that a raise in taxes is one of the options on the table, though it is not feasible.
“We have three options which we have to put on the table. We will either have to raise the taxes, borrow to raise the required amount, or come up with a supplementary budget, which would affect development spending,” he said.
Dr Thugge said increasing taxes would be a disincentive to investors, at a time when the government requires increased foreign direct and local investments to fill an already huge budget hole, standing at Sh500 billion.
Other options being given serious thought include borrowing or a significant slash on development budget.
Both of the latter options are also not feasible, Mr Thugge told Members of Parliament.
The Teachers Service Commission (TSC) urgently requires Sh17 billion to effect teachers’ salary increments after the Supreme Court ruled in their favour on Monday.
The commission needs a total of Sh72 billion to implement the four-year plan for the 288,060 teachers which has been backdated to July 2013.
This financial year, the government allocated TSC Sh181billion with another of Sh2.3 billion for recruiting additional 5,000 teachers, an exercise that has already started.
The government still faces a deficit of Sh570billion in its Sh2.trillion budget. The government says it expects to raise the money from external and domestic sources.