COTU slams mobile tax, demands PAYE relief for workers
National
By
Juliet Omelo
| May 27, 2026
The Central Organisation of Trade Unions (Kenya) has strongly opposed the proposed 25 percent excise duty on mobile phones while demanding urgent PAYE reliefs for Kenyan workers under the Finance Bill 2026.
In submissions to the National Assembly, COTU warned that workers are already struggling under the weight of rising living costs, inflation, and multiple statutory deductions, arguing that additional taxes would further weaken household incomes and economic productivity.
COTU Secretary General Francis Atwoli said Kenyan workers have become overburdened by taxation despite stagnant wages and increasing economic pressure.
“Kenyan workers are overtaxed and overstretched. PAYE reforms are no longer optional; they are necessary to restore workers’ purchasing power and stimulate economic growth,” said the SG.
He noted that the workers’ umbrella body is proposing a review of PAYE bands for employees earning up to Sh60,000 per month, an increase in the tax-free threshold, and inflation-based adjustments to protect workers from excessive taxation.
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According to COTU, the proposed reforms could inject more than Sh31 billion back into the economy through increased household spending and consumption.
The union argued that improving workers’ disposable income would not only ease financial pressure on families but also stimulate businesses and support economic recovery.
“When workers have more money in their pockets, they spend more, businesses grow, and the economy benefits. This is not just a labour issue; it is an economic recovery strategy,” Atwoli added.
At the same time, COTU mounted strong opposition to the proposed excise duty on mobile phones and cellular devices, saying the move would hurt millions of Kenyans who rely on mobile technology for livelihoods and communication.
The SG noted that mobile phones are no longer luxury items but essential tools used by boda boda riders, online freelancers, traders, students, delivery workers, and digital content creators.
“Mobile phones are tools of trade, education, and survival for millions of Kenyans. Taxing them heavily will only deepen inequality and exclude low-income users from the digital economy,” Atwoli said.
COTU warned that the tax could undermine Kenya’s digital economy, slow innovation, and limit access to communication and online opportunities.
The organisation further linked Kenya’s success in mobile money innovation through M-Pesa and Safaricom to policies that promoted affordability and widespread access to technology.
The union also backed proposed changes restricting gratuity tax exemptions to employees who serve continuously for at least three years, saying the measure could strengthen stable employment and reduce abuse of pension schemes for tax avoidance.
However, Atwoli cautioned Parliament to ensure employers do not exploit workers through short-term contracts aimed at denying them retirement benefits.
As debate on the Finance Bill 2026 intensifies, COTU is urging lawmakers to strike a balance between revenue collection and protecting workers’ welfare, purchasing power, and participation in Kenya’s growing digital economy.