The Federation of Kenya Employers (FKE) has voiced strong opposition to tax proposals in the 2026 Finance Bill, cautioning that Kenyan workers face excessive statutory deductions that are significantly reducing their take-home pay.
FKE Chief Executive Officer Jacquline Mugo highlighted that employees are grappling with numerous tax levies on their salaries, noting that businesses are simultaneously experiencing increased operational costs that strain their financial stability.
During a press conference on Thursday, May 21, Mugo announced that FKE would formally object to this year’s Finance Bill on Monday, May 25, when it is presented to the National Assembly’s Finance Committee.
“The government needs to address the substantial statutory deductions from employee payrolls, as this will negatively impact businesses as well,” she emphasized.
The federation warned that the high cost of living could diminish productivity and reduce consumer expenditure throughout the economy.
Mugo also criticized provisions allowing the Kenya Revenue Authority (KRA) to access personal data of Kenyan citizens, describing such measures as violations of privacy regulations.
“Regarding the KRA, we seek no additional taxation and oppose the collection of people’s personal information,” she added.
The 2026 Finance Bill aims to grant KRA data access authority to close tax loopholes and enhance compliance, particularly for businesses and individuals suspected of underreporting income.
However, FKE contended that unrestricted data access could result in misuse, surveillance concerns, and diminished data protection rights for ordinary Kenyans.
The federation’s objections follow government assurances of providing tax relief to salaried Kenyans through reforms targeting reduced Pay As You Earn (PAYE) for those earning below Ksh30,000.
During the Finance Bill 2026 briefing on May 11, 2026, Mbadi indicated that these reforms remain under consideration despite not being included in the current bill.
“We will reach a decision before the public participation concludes. By June 30 and before the Finance Bill’s passage, the government will likely introduce amendments to align PAYE with our previous proposal to raise the tax-free income threshold from Ksh24,000 to Ksh30,000 monthly. This proposal remains active,” stated Mbadi.