Finance Bill 2026: COTU warns against aggressive taxes, KRA overreach
By Sharon Atieno, May 27, 2026The Central Organisation of Trade Unions (COTU) has raised concerns over the Finance Bill 2026, accusing the government of overburdening workers through taxation while proposing provisions that could grant the Kenya Revenue Authority (KRA) excessive powers over taxpayers.
In its submission to Parliament on the Finance Bill, COTU Advisory Board member Barasa Adams criticised the government for failing to introduce meaningful Pay As You Earn (PAYE) reliefs despite repeated acknowledgement that Kenyan workers are struggling with a shrinking disposable income and rising cost of living.
“The state can no longer rely on an exhausted workforce to sustain the economy through aggressive taxation,” Adams stated in the submission.
The union argued that salaried Kenyans, particularly low- and middle-income earners, continue to shoulder the heaviest tax burden despite growing inflationary pressure and stagnant household incomes.
COTU proposes PAYE reforms
Speaking on behalf of the union on Wednesday, May 27, 2026, COTU Advisory Board member Barasa Adams said the organisation is proposing a comprehensive PAYE reform targeting workers earning up to Ksh60,000 per month.
“COTU proposes a comprehensive PAYE reform targeting at least workers earning up to Ksh60,000 per month in order to increase disposable income, stimulate domestic demand and support economic recovery,” Barasa said.
According to the union, workers within this income bracket form the backbone of Kenya’s productive workforce and consumer economy, yet they continue to face mounting inflationary pressures and rising payroll deductions.
COTU maintains that implementing targeted tax relief would inject billions of shillings back into the economy through increased household spending and business activity.
Union opposes expanded KRA powers
At the same time, COTU warned that some proposals contained in the Finance Bill could expose taxpayers to unfair treatment by expanding KRA’s authority in tax return management and appeals processes.
The union also opposed the proposed 25 per cent excise duty on mobile phones and additional levies targeting digital platforms, warning that the measures could raise consumer costs and undermine digital inclusion.
While supporting provisions aimed at strengthening retirement protection, infrastructure development and local manufacturing, the union insisted that lawmakers must strike a balance between revenue collection and protecting workers’ welfare.
COTU maintained that taxation policies should support economic growth without pushing already struggling households deeper into financial distress.