Worse times looming for employees in Ruto’s rising tax rates. While the regime is determined to raise taxes from 14 to 22 percent, thousands of employed are struggling to make ends meet. But that’s just the beginning of tough times.

Below, we’re looking at 10 ways rising taxes will impact your finances and well-being.

1. Reduced Disposable Income

Higher tax rates mean Ruto’s government will take away a larger portion of our salaries. This will directly reduce our disposable income, leaving less money for daily expenses, savings, and investments.

Thousands of employees will struggle to maintain their current standard of living.

2. Increased Cost of Living

High taxes take more money out of your paycheck.

Transportation, food, and housing, not to mention other essential goods and services, will become less affordable. That means additional financial strain on households.

Many employees will find it harder to keep up with the rising cost of living.

3. Lower Savings and Investments

Higher taxes lead to reduced employees’ savings and investing capacity. The population on paycheck will experience hardships attaining their long-term financial goals.

Planning for your retirement or funding your education won’t be easy.

4. Decreased Financial Flexibility

You’re working, but can’t achieve financial flexibility. It hurts, but that’s what an unsustainable rise in tax causes. Why?

Because…

Higher taxes reduce take-home pay. Subsequently, you will have less cushion to handle unforeseen financial challenges.

What that means is many will become highly vulnerable to financial crises.

5. Increased Debt Levels

As living costs rise while your disposable income reduces, you turn to more borrowing. You end up with increased personal debts.

6. Reduced Employee Morale and Productivity

Soon, nearly half of what’s in your pay slip will go to the taxman. Once it happens, your motivation and productivity will die.

With the financial stability lost to higher taxes, depression steps in. No more focus on work.

The results are low overall productivity and less job satisfaction.

7. Impact on Small Businesses

The rising tax rates will also claim the financial efficiency of SMEs for which millions of Kenyan employees work. Startups will resort to salary cuts.

Lucky SMEs and startups will potentially choose layoffs.

What happens?

Limited opportunities for career growth. Job insecurity.

8. Hindered Career Advancement

With tax rises, we should expect fewer promotions. Companies will feel the pinch of higher taxes.

No room for salary increases. And for employees hoping to advance their careers, tougher times are ahead.

9. Exacerbation of Income Inequality

Wider gap between the poor and the wealthy. Because higher taxes disproportionately affect the middle-class population.

10. Economic Uncertainty

The overall economic growth will be stifled because businesses and employees are both feeling the financial strain.

Looming slower economic recovery accompanied by a cycle of lower business investments and reduced spending will leave no employee unaffected.

Anyway, being aware of the potential impacts of rising taxation can help you plan.

We also need to champion anti-over taxation measures.