Gov’t asked to cap NSSF benefits tax

By Ritah Kemigisa

Economists have asked government to cap the proposed tax on NSSF benefits.

According to the NSSF Amendment bill, 2019, Member benefits shall be taxed at the point of payment and taxation shall be at the prevailing rate at the time of payment of the benefit.

Ramathan Goobi a renowned economist says taxing benefits given at the age of 55 years is good because it rises the total amount of benefits one receives since the member’s income and the fund’s investment are tax exempt.

He however says with the current crave by government to widen the tax base, there is fear the NSSF tax could be increased over time hence affecting the amount received by the members.

Goobi meanwhile says exempting benefits for members over the age of 60 years gives social security true meaning and will encourage saving for long-term.

According to the NSSF managing director a beneficiary whose annual salary amounts to shs 120M and above will be subjected to 40% tax while those whose annual pay is below shs 120M will have their savings subjected to 30% tax deductions.