Pension’s regulatory body wants tax incentives increased to boost retirement savings

Pension’s regulatory body wants tax incentives increased to boost retirement savings

March 3, 2020 0 By mykenyancareers
KENYANS WALKING - Pension’s regulatory body wants tax incentives increased to boost retirement savings
Nzomo says there is still more space for more tax incentive, even as the International Monetary Fund warns of a ticking time bomb in the sector where the gap between retirement dues and actual savings continues to grower wider./FILE

NAIROBI, Kenya, Mar 3 – The Pension Industry is pushing for a rise on tax incentives to boost retirement savings for Kenyans, Retirement Benefits Authority CEO Nzomo Mutuku has said.

Nzomo says there is still more space for more tax incentive,
even as the International Monetary Fund warns of a ticking time bomb in the sector where the gap between
retirement dues and actual savings continues to grower wider.

“The new
proposals are in areas of tax where we feel that there is room for more tax incentives
for saving for retirement,” said Mutuku.

The cost of
settling pensions has been 600 per cent in the last 15 years with an estimated
20,000 civil servants projected to retire every year.

Other key areas the industry wants reviewed include striking
a balance in conditions for both occupational and individual schemes and revising
the investment guidelines on infrastructure.

“We also will discuss with the treasury some areas of
harmonization where we are having different requirements for occupational schemes
as opposed to individual schemes and also looking to provide infrastructure
with a specific asset class,” Mutuku adds.

Last year, pension which is paid from tax collections
rose to Sh104 billion 2019, compared to Sh86 billion collected in 2018.