Employers oppose new taxes in finance bill 2026

The Federation of Kenya Employers has opposed tax measures in the 2026 Finance Bill, citing heavy burdens on workers and businesses. FKE plans to submit an official objection on Monday.

The Federation of Kenya Employers (FKE) has opposed proposed tax measures in the 2026 Finance Bill. FKE Chief Executive Officer Jacquline Mugo said on Thursday that workers face multiple statutory deductions that shrink their pay and raise business costs.

Mugo announced that FKE will file an official objection to the bill on Monday before the National Assembly's Finance Committee. She called on the government to reduce high statutory deductions on employee payrolls.

The group also protested provisions allowing the Kenya Revenue Authority access to private data, describing it as a breach of privacy. The bill aims to improve tax compliance by granting KRA such powers.

This comes after earlier government promises to raise the tax-free income threshold for those earning below Ksh30,000, a proposal still under consideration according to Treasury Cabinet Secretary Mbadi.

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Treasury Cabinet Secretary John Mbadi reviewing PAYE tax relief documents in a government office
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Mbadi: PAYE tax relief proposal still under active consideration

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Treasury Cabinet Secretary John Mbadi has confirmed that the government’s earlier proposal to raise the PAYE tax-free threshold from KSh 24,000 to KSh 30,000 remains under consideration, despite its absence from the draft Finance Bill 2026.

Kenya's National Assembly has called for public submissions on the Finance Bill 2026, which proposes new taxes on mobile phones, imported second-hand clothes and digital assets.

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Kenyan opposition leaders have urged Parliament to reject the Ministry of Finance's Infrastructure Bill, 2026 and halt the plan to sell government shares in Safaricom. They argue that the proposals threaten constitutional safeguards for public funds and strategic assets. They also call for an independent review and thorough assessment of assets before any action.

The national assembly has passed the national infrastructure fund bill (national assembly bill no. 1 of 2026), moving the legislation one step closer to becoming law. The bill, introduced by majority leader Kimani Ichung'wah, underwent its third reading and was approved by a large majority on Thursday, March 5. Opposition leaders have criticized the move and demanded treasury cabinet secretary John Mbadi be summoned over alleged contradictions in his statements.

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Labour Cabinet Secretary Alfred Mutua signed legal notices on May 7 effecting a 12 percent rise in general minimum wages and 15 percent for agricultural workers. The move follows President William Ruto's Labour Day announcement and aims to address rising living costs.

Opposition senators criticized President José Antonio Kast's National Reconstruction Plan, labeling it a 'hidden tax counter-reform' due to tax cuts that would defund the state by up to US$2.8 billion annually. In a tense La Moneda meeting, they warned against rollbacks on social rights. The bill is expected to enter Congress on April 1.

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The Chamber of Deputies' Finance Committee began on Tuesday the detailed discussion of President José Antonio Kast's reconstruction and economic reactivation megareform, amid tensions over more than 1,295 amendments filed by the opposition.

 

 

 

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