The Federation of Kenya Employers (FKE) has opposed proposed tax measures contained in the 2026 Finance Bill, warning that Kenyan workers are already burdened by heavy statutory deductions that are shrinking their pay.
FKE Chief Executive Officer, Jacquline Mugo, said workers are struggling due to multiple tax deductions on their salaries, adding that employers are also feeling the pressure as the cost of doing business continues to rise.
Addressing the press on Thursday, May 21, Mugo said FKE will be filing an official objection to this year’s Finance Bill on Monday, May 25, before the National Assembly’s Finance Committee.
“We are calling on the government to see what can be done to alleviate the high level of statutory deduction on employees’ payrolls because that will also put pressure on businesses,” she said.
The FKE argued that increasing taxes at a time when most Kenyans are facing a high cost of living could hurt productivity and weaken consumer spending across the economy.
During the presser, Mugo also protested against the provisions granting the Kenya Revenue Authority (KRA) powers to access Kenyans’ data, terming it a breach of privacy regulations.
“In regard to KRA, we want a situation where there is no increase in taxation and access to people’s data and related issues,” she added.
The 2026 Finance Bill seeks to grant KRA the power to access data with the aim of sealing tax loopholes and improving compliance, especially among businesses and individuals suspected of underreporting income.
However, FKE argued that giving KRA unrestricted access to sensitive information could lead to abuse, surveillance concerns, and erosion of data protection rights for ordinary Kenyans.
FKE’s reservations come months after the government promised to provide relief to salaried Kenyans through reforms aimed at reducing Pay As You Earn (PAYE) for Kenyans earning below Ksh30,000.
Speaking during the Finance Bill 2026 briefing on May 11, 2026, Mbadi said the proposal to give tax relief to Kenyans earning below Ksh30,000 is still under consideration despite its absence in the 2026 Finance Bill.
“Before the public participation process ends, we will make a decision. Before June 30 and before the Finance Bill is passed, the government is likely to propose amendments to align PAYE with our earlier proposal to increase the tax-free income threshold from Ksh24,000 to Ksh30,000 per month. So the proposal is still on the table,” said Mbadi.