A parliamentary committee is seeking to engage National Treasury Cabinet Secretary John Mbadi on how to address the widespread violation of the one-third salary rule in light of recent tax measures.
The Public Accounts Committee of the National Assembly is looking for a solution after several government departments failed to comply with the constitutional mandate that civil servants’ net salaries should not exceed one-third of their basic pay. The committee, led by Butere MP Tindi Mwale, attributes these violations to the new tax policies introduced over the past two years.
In that time, employees have seen an additional 1.5 percent deducted from their gross salary, along with a further 2.75 percent for the mandatory Social Health Insurance Fund. As a result, many employees are ending up with net pay that exceeds the one-third threshold of their basic salary.
The Employment Act of 2007 also restricts employers from deducting more than two-thirds of an employee’s basic pay.
Now, MPs on the oversight committee are calling for discussions with the Treasury to find a way forward, as numerous civil servants are taking home less than the legally required one-third of their salary.
This issue was brought to light following Auditor General reports that highlighted the growing number of public servants whose net pay falls below the statutory limit.
“It’s time we engage with the National Treasury to understand why public servants are not adhering to the law,” said Lugari MP Nabii Nabwera.
Rarieda MP Otiende Amollo echoed the call, suggesting a review of the regulations to better reflect the current fiscal realities. “We need to have discussions so we can propose policy adjustments,” Amollo said.
Their comments came after a meeting with Roads Principal Secretary Joseph Mbugua, during which the Auditor General’s findings on non-compliance with the one-third salary rule were discussed. In her 2022-23 report, Auditor General Nancy Gathungu flagged the Roads Department for paying 131 employees net salaries that fell below the required threshold.
