Employment –Latest report now confirms that most employers in the country have started reducing their workforce as well as salaries on employees.
Chief Executives CEOs maintain that job cuts is now inevitable due to high taxation and oppressive business environment.
It is reported that, before January 2024, thousands of people would have lost their jobs as some forced to put up with reduced pay slips.
Data from the survey
A scientific survey conducted by the Central Bank of Kenya CBK between September 4 and 15, established that about 26.3 per cent of company bosses, revealed that they would reduce their workforce in the 2023 Q4.
The report, according to CBK, 1,000 CEOs were surveyed across board including manufacturing, financial services, professional services, healthcare, agriculture, tourism, transport, and storage among others, and the results were that job cut was the only solution.
Additionally, 635 employers revealed that they will no longer be employing more staff even when need arises.
On the contrary, about 102 CEOs opened up that they could still employ/ increase their workforce in due time.
Among other reasons, businessmen listed fuel costs, difficult business environment created by high taxation, increased costs of doing business, inflation, reduced consumer demand, and the exchange rate as some of the reasons for the decision.
“Other highly ranking concerns were the exchange rate and reduced consumer demand. Supply chain disruptions and weather conditions, were also important for agriculture sector firms.”
Recent Financial Act
They categorically said, the current Financial Act had piled pressure on their revenue as it targets to forcefully take way a big chunk of taxes every year.
In the Act, employers are now required to match the 1.5 per cent employee’s housing fund contribution. This is in addition to the increased rates for the National Social Security Fund (NSSF) and select VAT increase.
“The business environment and increased taxation were of greater concern for firms in the services and manufacturing sectors. Firms in the agriculture sector on the other hand were equally concerned about the business environment and the economy,” the CBK survey noted.
So far, many companies are shutting down some deciding to quit the Kenyan market as Kenya Revenue Authority KRA intensifies measures to deal with tax evaders.
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