A tax is a compulsory contribution by persons liable to pay tax to the state to defray the expenses incurred in the common interest of all, without reference to special benefits conferred. By compulsory we mean any person who refuses to pay a tax is liable to punishment. Tax revenue is used for the benefit of all and there is no direct „Quid Pro Quo‟ payment. The National social Security Fund is a government fund which was established by the National social Security Fund Act 1965 for the benefit of workers. It is a compulsory savings scheme into which the employer pays a statutory contribution for every employee who is a member of this fund. The scheme is applicable to those employers having five or more employees. The average rate of contribution is 10% of a worker‟s wages half of which is paid by the employer an half by the worker.
The following benefits are provided under this scheme:
- Age benefits–paid to a member at age of sixty or when he retires from paid employment,whichever is later.
- Withdrawal Benefit–paid to a member who is at least fifty-five years of age and has not engaged in paid employment during the previous three months.
- Invalidity Benefit–Paid to a member who is permanently incapable of work because of physical or mental disability.
- Survivors Benefit–Paid to the dependants of deceased member
- Immigration Grants–Paid to a member who is permanently emigrating from Kenya.