FKE Urges Government to Ease Tax Burden in Upcoming 2025/2026 Budget to Prevent Job Losses

The Federation of Kenya Employers (FKE) has urged the government to ease the tax burden in the 2025/2026 budget, warning that continued pressure on employers could lead to massive job losses.

Speaking during the 64th Annual General Meeting (AGM) of the FKE Coast Branch in Mombasa, CEO Jacqueline Mugo stressed the need for a more supportive fiscal environment to help businesses navigate economic challenges.

Mugo disclosed that FKE has submitted several proposals to the National Treasury, including a review of the statutory deductions framework. “We’ve recommended that deductions be pegged on basic pay instead of consolidated pay to ease pressure on employers’ payrolls,” she stated.

FKE is also pushing for the reduction of the housing levy from 1.5% to 0.5% of total earnings, noting that a significant amount has already been raised for the government’s housing agenda.

Mugo emphasized that while the employers’ body supports national development goals, the current tax regime is unsustainable and weighs heavily on both businesses and citizens.

She lauded progress in sectors like tourism and hospitality, boosted by post-Covid-19 recovery strategies, but called for further reforms. “We urge the government to liberalize travel, introduce visa-free entry for short-stay visitors, and enhance air access to support these gains,” Mugo added.On trade issues, FKE raised concern over Sudan’s ban on Kenyan tea imports, citing Sh2.4 billion in losses.

Mugo called for urgent diplomatic engagement to resolve the crisis. She also urged the Mombasa County Government to review its truck cess charges and criticized non-tariff barriers affecting regional trade through the Mombasa Tea Auction.

FKE further appealed for round-the-clock customs operations and renewed focus on securing favorable trade agreements amid rising global protectionism.