Bankers Association calls for PAYE cut as workers face growing tax pressure

The Kenya Bankers Association has raised concerns over the rising tax burden on Kenyan workers, arguing that salaried employees are currently paying higher income tax rates than companies.

In a statement shared online on Monday, May 25, 2026, the association noted that Pay As You Earn (PAYE) tax stands at up to 35 per cent, compared to the 30 per cent corporate tax charged on companies.

According to KBA the disparity has continued to erode workers’ take-home pay at a time when many households are grappling with the high cost of living.

The bankers’ association backed proposals seeking a 5 per cent reduction in PAYE, saying the measure would help ease financial pressure on employees while boosting disposable income among Kenyan households.

“The proposed 5 per cent PAYE reduction would help correct the imbalance, ease pressure on households, and improve disposable income for workers,” the association stated.

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KBA argued that Kenya’s tax framework should strike a balance between supporting workers and promoting economic growth, warning against placing excessive pressure on salaried employees during a period of economic uncertainty.

“A fairer tax system should support both workers and economic growth,” the association added.

The remarks come amid wider concerns within the financial sector about Kenya’s economic outlook. Commercial banks have recently urged the Central Bank of Kenya to retain the benchmark lending rate at 8.75 per cent, citing global economic uncertainty and inflationary risks.

By Obegi Malack

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