Pension Programs

Tax Deductions for Contributions 

• Contributions to a registered pension scheme, provident fund, or individual retirement fund made by an employer or employee are subject to tax deductions.

• The maximum deductible amount for employer contributions to registered pension schemes and provident funds is proposed to be increased from KSh. 20,000 to KSh. 30,000 per month. 

    Tax Exemptions 

• Payments of pension benefits from registered pension funds, provident funds, or individual retirement funds upon reaching the retirement age are exempt from tax. 

• This exemption also applies if a person retires due to ill health or withdraws from the fund after twenty years from the date of registration as a member of the fund. 

   Post-Retirement Medical Fund Relief

• Contributions to a post-retirement medical fund are eligible for tax relief, up to a limit of KSh. 10,000 per month. 

in general, this is a big win, as increased deductible limits and tax exemptions help enhance the financial security of retirees.