Speaking during a presentation to the National Development Implementation Committee (NDIC) themed “Consolidating Kenya’s Fiscal Space for Better Service Delivery” at Kenya School of Government, Kabete, on Wednesday, 12 November, Kenya Bankers Association (KBA) Chief Executive Officer Raimond Molenje underscored the importance of maintaining confidence across all sectors of the economy.
He urged the government to reconsider plans to overhaul Pay As You Earn (PAYE), warning it would further erode Kenyans’ purchasing power. “As the private sector, instability in politics, government, and the economy hits us harder.
With about 20 months to the general elections, we need stability before and after the polls, and central to this is restoring the lost purchasing power for Kenyans and businesses,” he said. KBA called on the government to scrap the top two PAYE bands of 32.5 and 35 per cent in order to reduce the lowest band from 10 to 5 per cent.
This would reinstate the 20 per cent band and expand the 25 per cent band, which would leave households with more disposable income. The presentation was made at a high-level meeting attended by all Cabinet Secretaries and Principal Secretaries, and presided over by the Prime Cabinet Secretary Musalia Mudavadi.
The session focused on fiscal alignment and strengthening national service delivery frameworks. Treasury Cabinet Secretary John Mbadi and Principal Secretary Dr Chris Kiptoo were among the senior government officials in attendance. Molenje noted that consolidating fiscal space is key to enabling Kenya to finance its development priorities, support enterprise growth, and safeguard macroeconomic stability.
He reaffirmed the banking industry’s commitment to collaborating with the government to advance policies that enhance fiscal sustainability, financial inclusion, and economic resilience. “A stable and predictable economic environment is essential for investment, job creation and sustainable growth. The banking sector remains ready to support national efforts that promote fiscal prudence and strengthen Kenya’s competitiveness,” he added.
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