FKE, KAM Renew Push to Cut PAYE as Workers’ Take
The Federation of Kenya Employers (FKE) is urging the government to reduce PAYE tax rates to alleviate the financial burden on workers and stimulate the economy. Employers argue that high taxation is stifling consumer spending and hindering business growth ahead of the 2027 General Election.
Why it matters
The push for tax reform reflects broader economic tensions in Kenya regarding the cost of living, unemployment, and the sustainability of the formal labor market.
An image showing the entrance of the National Treasury buildings Photo National Treasury. --> The Federation of Kenya Employers (FKE) has called for a review of PAYE bands and a reduction in the tax burden on workers, warning that high taxation is shrinking take-home pay and worsening pressure on businesses ahead of the 2027 General Election.
FKE Executive Director Jacqueline Mugo, while speaking during a roundtable interview on NTV on Monday, said employers were increasingly concerned about the state of the labour market, noting that about one million young people enter the job market every year while the formal economy lacks the capacity to absorb them.
Mugo said a significant number of young Kenyans are instead forced into the informal sector, placing additional pressure on businesses while reducing the country’s formal employment base.
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