As the ‘Voice of Employers’, FKE’s key mandate is to advocate and defend the interests of employers and to push for a friendly and stable business environment guided by supportive policies and regulations.
The Federation of Kenya Employers held its 3rd Management Board Meeting on 15th September 2023 at Waajiri House. Thereafter, a press conference was held to address, among other key issues;
1) The state of business operating environment,
2) High cost of living
3) Unfavorable tax regime
4) Legislative changes including Social Health Insurance Bill, 2023, Primary Health Care Bill, 2023, Facility Improvement Financing Bill, 2023, Digital Health Bill, 2023 and Employment (Amendment) Bill, 2022.
While addressing the press, FKE National President, Dr. Habil Olaka said: “The underpinning philosophy in tax management should not be taxing people and corporate into poverty. It should instead support many businesses and persons to increase their productivity, and thereby enter the tax bracket.”
The Federation also took issue with the proposed legislative changes included in the Universal Health Coverage Bills 2023 since this will raise business costs and strain the already squeezed incomes at a time when Kenyans are struggling with the high cost of living. The Federation holds the view that the approach by the government to place the burden of funding UHC on formal workers and employers is misguided, since the formal sector accounts for a small percentage of overall wage employment in the country as compared to the informal sector. “FKE holds the view that this model will face challenges given that the formal wage employment is only 15% of the total wage employment,” stated Mr. Olaka.
On her part, Ms Jacqueline Mugo, Executive Director & CEO said the move by the government to increase the tax base has placed a huge burden on formal employers and employees and could result in business closures, job losses, and a slowdown in economic growth. “All this raft of changes, whether its’ looking at health, training, PAYE, and housing levy just means that there is more burden on employers, and they have to find innovative ways of getting the job done without being stuck with a fixed wage bill…..the more you tax the formal sector, the more you make it difficult for those with enterprises to create jobs, and we’re seeing that.” She said.
Full Press statement can be accessed through www.fke-kenya.org
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