The Federation of Kenya Employers (FKE) has urged President William Ruto’s administration to consider lowering the Pay As You Earn (PAYE) tax to a maximum of 25 per cent in order to cushion Kenyans and businesses grappling with the high cost of living.
In a statement to newsrooms signed by President Dr. Habil Olaka and Executive Director Jacqueline Mugo on Friday, FKE emphasized that it is imperative for the State to introduce measures to bolster the purchasing power of citizens and cash flow in businesses.
“We appeal to policymakers to consider reducing the PAYE to a maximum of 25%. This is because food inflation remains the highest contributor to the cost of living. With households spending about 60% of their income on food, it is prudent that households are supported to increase their disposable income,” read the statement.
The federation similarly urged the State to restore the Value Added Tax (VAT) on petrol to its previous 8 per cent rate as it stood before the enactment of the Finance Act, 2023 due to the regressive impact the levy has had on Kenya’s economy.
The employers’ body likewise advocated for the corporation tax to be reverted to 25 per cent.
