Pension fund managers have lauded the proposed tax exemptions on gratuity and pension payments, as outlined in the 2025 Finance Bill.
Pension Fund administrator CPF says if the proposal passes as is, it has the potential to boost retirement savings and improve the financial security of retirees.
President William Ruto’s declaration on May 1, 2025, during the 60th Labour Day celebrations, confirmed that both pension and gratuity payments will now be exempt from taxation.
Industry stakeholders have expressed strong support for the government’s tax reforms, highlighting their potential on retirees livelihoods.
The reforms include increasing the tax-deductible pension contribution limit from Ksh 240,000 to Ksh 360,000 annually, allowing for greater savings without increasing taxable income.
The CPF Foundation launched a program designed to support the elderly by enhancing their quality of life financially and socially.
The initiative aims to provide sustainable solutions to the challenges faced by older persons, including access to healthcare, housing, and social inclusion.
