Manufacturers, Banks warms up to tax free lunch schemes

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Manufacturers and Commercial banks are looking to effect a KSh 4,000 (USD39)  pay rise for employees through tax-free lunch schemes in a quest to boost the productivity of workers and shore up their bottom lines.

Digital lunch scheme provider, Apptivate Africa has reported increased interest for its mobile lunch delivery app, M-Kula largely from local manufacturers and commercial lenders.

“A number of companies, especially in the manufacturing and banking industries that were lax in early 2018 are now interested in exploring how we can help them,” said Apptivate Africa Chief Executive officer, Mr Neil Ribeiro.

Apptivate Africa has particularly expressed optimism the interest by manufacturers will accelerate momentum and boost the sector’s contribution to the economy.

Manufacturing sector contribution to Gross Domestic Product (GDP) has been stagnating at about 10 per cent over the last few decades.

“We are ready to be part of the big role of re-awakening the sector in line with President Uhuru Kenyatta’s Big 4 Agenda on manufacturing,” said Mr Ribeiro.

The Presidency has listed policy review for sector and incentives among priority areas to enhancing the manufacturing sector’s contribution from current 9.2 per cent to 15 per cent of GDP by 2022.

Apptivate said improved business environment, investor confidence in 2018 and a growing need to create an employee-employer emotional connection, will accelerate demand for mutually benefiting incentives like meal vouchers by companies in 2019.

“Employers are realizing that they need to provide more than a paycheque to keep their teams motivated.  Food is a basic human need, and a great way to get employees motivated and to create an emotional connection between them and the company,” said Mr Ribeiro. 

“This is to show our commitment to improving staff welfare that has a significant effect on employee productivity and company bottom-line. Feeding is key to the wellbeing of employees. With M-kula we are pushing for the best quality. The App is easy to use, transparent and has a perfect bookkeeping system and helps us in remitting our Taxes,” said NKG Chief Executive Office, Pavan Koshal.

Employees under this scheme are entitled to Sh 48,000 in tax-free meal allocations wired directly to their mobile wallet annually, translating to a tax-free pay rise of Sh 4,000.

Uptake of the M-Kula App grew four-fold by end of 2018 compared to the previous year backed by key sign up of top brands including KFC, Ruiru based German Coffee Miller, NKG, Haco, Mondo Rides, Bags & Balers, Kingsway Tires, Kenpoly and Kenpoly.

Over the period, a number of Kenyan employees enjoying tax-free meals was recorded at over 4,000, with employers reporting between 12-25 per cent rise in productivity.

 

“At the beginning of 2018, you could redeem M-Kula at just over 100 locations in Nairobi.  Today you can redeem it at 280 locations countrywide,” said Mr Ribeiro.

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