Teachers up in arms against new loan fee
What you need to know:
- The new rules were issued by TSC in a circular titled "Guidelines and New Service Charge Rates for Third Party Deductions".
- All teachers will be required to pay three per cent service fee to TSC, on top of the interest they will be paying to banks.
Teachers are up in arms against a new rule that requires them to pay more money for every loan they acquire.
Bankers also joined in the protest, saying the directive would have “far reaching implications”.
The new rules were issued by TSC in a circular titled "Guidelines and New Service Charge Rates for Third Party Deductions" to all banks, micro-finance institutions, insurance firms and the Directorate of Personnel Management.
According to the new guidelines, all teachers will be required to pay a three per cent service fee to TSC, on top of the interest they have to pay to banks.
The Kenya National Union of Teachers (Knut) warned there would be a severe backlash from teachers if TSC proceeded to implement the guidelines.
On Monday, Knut Secretary-General Wilson Sossion accused TSC of drafting the proposals without considering teachers’ input.
“Already teachers are paying heavy taxes. It will be absurd that they are asked to pay a three per cent service fee again,” he said.
He said TSC could not act unilaterally on such an issue.
“It should not be implemented. It is the duty of the employer to cater for the needs of teachers. Teachers will not accept these guidelines,” he said.
'DOUBLE TAXATION'
The Kenya Union of Post Primary Education Teachers (Kuppet) also protested to TSC.
“It’s our considered opinion that if the cost of service charge is borne by the teachers, it would amount to double taxation and (an) uncalled-for financial loss,” said Kuppet chairman Omboko Milemba in a letter to TSC.
He went on: “Kindly consider stopping the said charges and occasion a meeting with stakeholders in this regard.”
Kenya Bankers Association CEO Habil Olaka also raised concerns about the directive.
“We would like to register our concern that a circular with such far reaching implications on the operations and business of financial service providers was issued without any consultations… and at very short notice to implement the said structure,” said Mr Olaka in a letter to TSC Secretary Gabriel Lengoiboni.
