The Federation of Kenya Employers (FKE) is urging the government to ease the tax burden in the 2025/2026 budget cycle, warning that continued pressure on employers may force businesses to downsize their workforce.
FKE CEO Jacqueline Mugo says they have presented a raft of proposals to the Cabinet Secretary of the National Treasury, calling for a comprehensive review of the tax regime, noting that employers are struggling to meet the demands of the Employment Act, 2007. "We looked at the total range of statutory deductions that have been introduced and requested that they be based on the basic pay as opposed to the consolidated pay because we think that will alleviate the level of cash that is flowing out of people's payrolls," Mugo said.
FKE is also proposing the reduction of the housing levy from the current 1.5 percent to 0.5 percent of the total earnings. "We know a good amount of money has been raised already to cover the housing aspirations of the government," the CEO stated.
She affirms that they support reforms aimed at reducing the tax burden on citizens and businesses. "We agree with the public discourse indicating that the current situation is not sustainable, as it has made life very difficult for ordinary citizens.
