Will shrinking payslips tip the scales in 2027 election?

For millions of salaried Kenyans, the sting of taxes goes beyond the numbers on a payslip—it’s a daily fight for survival.

With up to 45 per cent of their earnings taken before they even see their paycheck, workers are left scrambling to cover the basics, let alone put anything aside for the future.

As the government tightens its fiscal grip, the debate over Kenya’s tax burden has evolved from an economic concern to a full-blown political battleground.

Supporters of President William Ruto argue that these taxes are necessary for development, while opponents, including many professionals and workers, decry the situation as a crippling burden on their lives.

The Federation of Kenya Employers (FKE) has expressed concern about the challenges faced by both employers and employees in adhering to statutory requirements such as PAYE, Housing Levy and the SHIF.

“Employers face challenges complying with statutory requirements such as PAYE, Housing Levy, and SHIF, which collectively account for 40-45% of gross pay. These deductions significantly reduce employees’ disposable income, sometimes leaving them with less than one-third of their salary, as required under Section 19(3) of the Employment Act 2007,” FKE said.

President Ruto has been nicknamed “Zakayo,” a reference to the biblical tax collector, infamous for his ill-gotten wealth.

Far from being rattled by the comparison, Ruto has embraced it.

He defiantly defends his policies, saying the burdens Kenyans carry today will pave the way for tomorrow’s prosperity.

While in Bumala, Busia County, recently, Ruto dismissed critics who call him “Kasongo” or “Zakayo,”: “Even if they call me Kasongo and Zakayo so long as I can deliver on my development promises, I have no problem.”

Basic services

But for many ordinary Kenyans like George Okuta, a primary school teacher in Kisumu, the escalating tax burden is a constant struggle. 

At the end of the month, Okuta takes home just Sh17,000 after deductions. “Out of that Sh17,000, I pay Sh12,000 in rent, leaving me with only Sh5,000 for commuting, buying food, and supporting my family,” Okuta says. “That’s why many of us, especially public servants, end up taking loans to survive.”

As the firstborn in his family, Okuta also bears the responsibility of supporting his mother and paying school fees for his two children. He questions the value of paying taxes for services he rarely receives. “I’m paying taxes for things like SHA and the Housing Levy, but these are not helping me. Accessing public services is a problem, and I don’t understand why I pay all that in taxes when even basic services like health and affordable housing are out of reach,” he says.

Okuta and many like him are increasingly disillusioned with the government’s promises. “It feels like we’re working for the government but never getting anything in return,” he adds.

Kamau, a 37-year-old worker in Nairobi, shares Okuta’s frustrations. After taxes, Kamau remains with just Sh23,000. Between his daily commute from Umoja to Nairobi, where he spends Sh100 on transport, paying Sh20,000 for rent, and covering his family’s needs and his parents’ medical bills, his salary is quickly depleted.

“If taxes keep rising like this, we might as well ask the government to take our salaries and give us the taxes instead,” Kamau says bitterly.

“SHA and SHIF aren’t working. The taxes we pay get stolen and sent abroad,” he adds. Okuta and Kamau represent nearly three million Kenyans who are facing a growing tax burden.

FKE says that after deductions, many employees remain with far less than they need to cover their basic expenses.

“These deductions expose employers to penalties and decrease employees’ purchasing power, causing a 15-20% drop in retail sales and sales of fast-moving consumer goods,” the FKE stated in a report.

One of the most controversial tax initiatives is the housing levy introduced in 2023 as part of the government’s affordable housing agenda. Public servants are required to contribute 1.5 per cent of their salary to the fund, which is matched by their employers. However, for many workers like Okuta, the promise of affordable housing feels like a distant dream.

“I’m paying the levy, but I know I won’t get a government house. This is just another deduction that doesn’t benefit me,” Okuta says.

But Ruto’s allies defend of the housing and health care programme, arguing that they are designed to benefit all Kenyans. Senator Aaron Cheruiyot has said that while the deductions may appear burdensome, they are ultimately intended to provide long-term benefits for all Kenyans.

“Under NHIF, I used to be deducted Sh1,700, but when my October payslip came out, under SHA, I was deducted Sh32,000. I almost wrote a message to the President,” Cheruiyot said in a video. “Those fighting SHA and SHIF were beneficiaries of NHIF. We need programmes that help all Kenyans, not a few.”

Tax incentives

The business community is also feeling the strain. The FKE has noted that in the past three years, 57 companies have declared redundancies, with 20 more following suit in 2024. High taxes and unpredictable fiscal policies have compounded the already difficult business environment. The FKE has urged the government to provide tax incentives, affordable credit, and skills development programmes to help businesses stay afloat.

“We need to address challenges like illicit trade, high production costs, and an unpredictable fiscal environment to restore Kenya’s competitive edge,” the FKE said in a statement.

Former Deputy President Rigathi Gachagua has been a vocal critic of the housing programme, calling it “a deception disguised as job creation.” Gachagua argues that the initiative fails to address the real needs of low-income Kenyans and is instead a mechanism for private interests to profit.

“If you want to build houses, you have to sign a contract with the Housing Principal Secretary and buy your materials from specific companies,” Gachagua claimed.

At the opening of the Democratic Action Party Kenya (DAP-K) offices on January 27, Gachagua also expressed frustration with the government’s handling of worker-related issues, accusing trade union leader Francis Atwoli of prioritizing praise for President Ruto over advocating for workers’ rights.

“Workers are being frustrated by numerous deductions like the housing levy and NSSF, but he does not say anything. His job is to praise the government,” Gachagua said.

With Kenya’s economy under pressure from inflation, debt repayments, and a widening fiscal deficit, 3.3 million taxpayers—primarily salaried employees and business owners—are shouldering the lion’s share of the government’s revenue collection.

“The biggest task we have is to defeat him (Ruto). Payslip holders are three million, and each of them has influence over at least two people. That’s nine million people who have a personal issue with William Ruto,” Gachagua said.

Ethnicity role

But Atwoli argues that salaried workers won’t be a decisive factor in the 2027 election. Atwoli, who believes Kenyan politics is largely driven by ethnicity rather than policy, dismissed the notion that the 3.2 million salaried Kenyans could influence the outcome of the election.

“Politics in Kenya is not issue-based—ethnicity plays a major role,” Atwoli said.

The core of the debate is the Kenya Revenue Authority’s (KRA) aggressive tax collection efforts, which have seen increased enforcement measures, stricter compliance requirements, and higher deductions from already stretched incomes. The Finance Act 2023 introduced a housing levy, higher PAYE rates, and a turnover tax for small businesses.

“Every month, my payslip shrinks while the cost of living rises,” said David Ochieng, a middle-income employee in Nairobi. “We’re taxed on our salaries, our spending, our businesses. It feels like the government is squeezing us dry.”

The opposition, public finance experts, and enterprenuers are urging the government to overhaul its tax system to simplify compliance and boost the business climate. They propose ending the annual introduction of new tax measures through the Finance Bill to create a more predictable tax environment.

Ndiritu Muriithi, the newly appointed Kenya Revenue Authority (KRA) chairman, supports this, noting that frequent tax changes disrupt businesses and prevent long-term planning.

“The need for an annual Finance Bill is a historical thing. I do not see any technical reason why it should be done the way it is done other than the weight of history,” he said.

“(Historically), price adjustments were an annual thing when we had price controls. The Minister for Finance would come to Parliament and explain how prices would change…(some of them effective) from midnight (on the day the budget was read).”