Kenya employers call for PAYE tax review and lower worker taxation

The Federation of Kenya Employers (FKE) has called on the government to review Pay As You Earn (PAYE) tax bands and reduce the tax burden on workers. FKE Executive Director Jacqueline Mugo stated that high taxation is diminishing take-home pay and increasing pressure on businesses.

Mugo noted that the formal economy is struggling to absorb the approximately one million young people entering the job market annually, forcing many into the informal sector. The FKE proposed broadening PAYE bands and lowering tax rates to increase disposable income, which they argue would stimulate consumer demand and benefit businesses.

The Retail Trade Association of Kenya (RETRAK) supported this call, linking weak consumer spending to sluggish production and limited job creation.