The Business Laws (Amendment) (No 2) Bill 2020 proposes that workers’ contributions to the National Social Security Fund (NSSF), National Hospital Insurance Fund (NHIF) and National Industrial Training Authority (NITA) be remitted on the same date (9th of every month).
The alignment of the dates is to facilitate the harmonisation of the deductions to curb employers’ evasion of the same.
Currently, NSSF deductions are made on the 15th, NHIF on the 9th while NITA on the 10th.
The payment on different dates have made it difficult for KRA to reconcile records and catch employers who were leaving out payments to some government agencies.
“Clause 13 of the Bill proposes to amend the National Social Security Fund Act, 2013 to provide for the contributions under the Act to be collected on the ninth day of the month for purposes of harmonizing payroll deductions through the Unified Payroll Return,” it states.
The Unified Payroll Return was developed for joint declaration and payment of Pay As You Earn (PAYE) and NSSF, NHIF and NITA deductions as an initiative under the Government of Kenya Ease of Doing Business agenda.
The portal will allow all the four institutions to monitor statutory payments coming from each employer, making it easier to analyse, reconcile, and pick out non-compliance.
For NSSF, employees’ contributions range between Ksh360 and Ksh1,080 per month for the first year, as for NHIF contributions are made as per their income.
Industrial training levy deductions are be paid annually at the rate of Ksh600 per employee per annum.
“Support Structures have been put in place in both institutions to ensure that employers are optimally supported to comply with this reform initiative and reduce their cost of compliance with labour taxes and levies,” NITA put out in statement in January 2021.
The government has reported losses amounting to billions due to non-compliance by employers. In the 2017/2018 financial year, NSSF reported that employers were still holding Ksh1.76 billion of contributions to the body with related penalties amounting to Ksh4.5 Billion.