Employers who deduct pension contributions from employees’ salaries but fail to remit them to retirement schemes could soon face stricter enforcement measures if a new Bill before Parliament is approved.
The proposed Kenya Revenue Authority (Amendment) Bill, 2026 seeks to expand the powers of the Kenya Revenue Authority (KRA), enabling it to recover unremitted pension contributions using enforcement mechanisms currently applied in tax collection.
Parliament Reviews New Enforcement Framework
The Bill, sponsored by the Leader of the Majority Party, is currently before the National Assembly’s Departmental Committee on Finance and National Planning for consideration and public participation.
Lawmakers say the proposed changes are intended to strengthen compliance and ensure workers’ retirement savings are protected from misuse by employers.
KRA Could Freeze Accounts and Recover Assets
If enacted, the legislation would allow KRA to pursue employers who fail to remit deducted pension contributions through measures such as agency notices, garnishee orders, account freezes and asset preservation actions.
The authority would effectively be granted powers similar to those it uses when recovering unpaid taxes.
Protecting Workers’ Retirement Benefits
Supporters of the Bill argue that thousands of employees risk losing retirement savings due to delayed or unremitted pension deductions despite regular deductions from their salaries.
The proposed law seeks to close enforcement gaps and enhance accountability among employers, particularly in sectors where pension remittances have remained a longstanding challenge.
Business Community Raises Concerns
While worker representatives have welcomed stronger safeguards for retirement savings, some employers are expected to oppose the proposal, citing concerns over increased compliance obligations and financial pressure on businesses facing cash flow difficulties.
Stakeholders are currently submitting views during the public participation phase before the committee prepares its report for debate in Parliament.
Should the Bill pass, KRA’s mandate would expand beyond traditional tax collection, positioning the authority as a central player in enforcing compliance on pension remittances and protecting workers’ long-term financial security.
