Appearing before the National Assembly Departmental Committee on Finance and National Planning on Monday, KEPSA representatives urged lawmakers to review and amend parts of the Bill, arguing that the country’s tax framework should support industrial growth and economic expansion rather than increase pressure on businesses already facing economic challenges.
The lobby group cautioned that excessive taxation on the formal sector could have a negative impact on investment, employment, and overall economic stability.
They emphasized the need for a balanced approach that supports government revenue collection while also protecting the ability of the private sector to grow and create jobs.
KEPSA chairperson Jaswinder Bedi told the committee that while the private sector supports government efforts to mobilise domestic revenue, such measures must be carefully designed to avoid harming economic competitiveness.
“We fully support the government’s agenda, but structural economic stability demands an intentional balance between aggressive domestic revenue mobilisation and the preservation of private sector competitiveness,” Bedi said.
He noted that businesses continue to operate under challenging conditions, including high operational costs, global economic uncertainties, and shifting market dynamics.
According to KEPSA, additional tax burdens could discourage investment and limit the ability of companies to expand their operations or hire more workers.
The lobby group further argued that a predictable and business-friendly tax environment is essential for sustaining long-term economic growth.
They called on Parliament to engage stakeholders more deeply in the legislative process to ensure that any tax changes reflect the realities faced by businesses across different sectors.
Members of the National Assembly Committee on Finance and National Planning listened to the submissions as part of ongoing consultations on the Finance Bill 2026, which seeks to introduce various tax and revenue measures aimed at supporting government expenditure and fiscal consolidation.
KEPSA’s concerns add to a growing list of submissions from different stakeholders, including professional bodies, industry groups, and civil society organisations, all of whom are reviewing the implications of the proposed Bill on the economy.
The private sector body stressed that Kenya’s economic recovery and growth strategy must prioritize competitiveness, productivity, and job creation, warning that overburdening the formal sector could have unintended consequences on employment levels and business sustainability.