NAIROBI, Kenya, Feb 14 – Recent pension tax reforms under the Tax Laws (Amendment) Act 2024 are expected to boost retirement savings and healthcare planning, according to industry players.
One of the key changes is the increase in the tax-deductible pension contribution limit from Sh240,000 to Sh360,000 annually Sh30,000 per month, allowing savers to put aside more funds for retirement without reducing disposable income.
The reforms also introduce tax-deductible contributions of up to Sh15,000 per month for post-retirement medical funds, addressing the rising healthcare costs for retirees.
Additionally, pension benefits will now be fully tax-exempt under specific conditions, including retirement at the official age, withdrawal due to ill health and at least 20 years of membership in a retirement scheme.
Industry experts say this move discourages premature withdrawals, ensuring financial stability in retirement.
The reforms also simplify the registration process for retirement schemes, eliminating the need for dual registration with KRA and RBA.
Stakeholders argue these measures align tax policy with economic conditions, promoting a stronger savings culture and enhancing the sustainability of Kenya’s pension system.
