COTU Calls for Major Changes to Kenya’s Finance Bill

Kenya, 26 May 2026 - The Central Organisation of Trade Unions (COTU) has proposed a raft of tax measures for inclusion in the Finance Bill, calling on the government to introduce worker-friendly policies aimed at easing the high cost of living.

In a submission to the National Assembly’s Finance and National Planning Committee, the labour movement said the proposals are designed to protect household incomes, stimulate economic growth, and cushion Kenyan workers from rising taxation and increasing financial pressure amid tough economic conditions.

COTU strongly opposes measures that would increase the cost of living, suppress workers’ purchasing power, undermine digital inclusion, threaten employment creation, raise production costs, and place additional burdens on workers without corresponding wage growth.

The proposal, signed by COTU Secretary General Francis Atwoli, acknowledges that the Finance Bill contains several positive measures intended to broaden the tax base, strengthen tax administration, support investment, enhance infrastructure financing, and promote local manufacturing.

However, the labour movement noted that the Bill also introduces measures likely to increase the cost of living, raise production costs, burden workers, weaken purchasing power, and heighten labour market insecurity.

“COTU proposes comprehensive PAYE reforms targeted at workers earning up to KSh 60,000 per month in order to increase disposable income, stimulate domestic demand, and support economic recovery. Workers within this income bracket are among the most affected by inflationary pressures and statutory deductions, despite forming a significant component of Kenya’s productive workforce and consumer economy,” read part of the submission.

COTU further proposed the revision of PAYE bands for workers earning up to KSh 60,000, an upward adjustment of the tax-free threshold, a reduction of excessive payroll taxation on middle- and lower-income earners, and the automatic annual inflation adjustment of PAYE bands to prevent bracket creep and protect workers from inflation-driven taxation.