Kenya: KRA Powers Expanded to Pursue Unremitted Pension Deductions

Nairobi — Employers who fail to remit pension deductions collected from workers could soon face tougher enforcement measures, including bank account freezes and asset seizures, under a new Bill before Parliament.

The proposed Kenya Revenue Authority (Amendment) Bill, 2026 seeks to expand the Kenya Revenue Authority's (KRA) enforcement mandate, allowing it to pursue unremitted pension contributions using mechanisms similar to those employed in tax recovery.

The Bill, currently under consideration by the National Assembly's Departmental Committee on Finance and National Planning, aims to strengthen compliance and protect employees' retirement savings.

According to a legislative notice published by Parliament, the Bill--sponsored by the Leader of the Majority Party and listed as National Assembly Bill No. 28 of 2026--has already undergone its First Reading and been committed to the committee for public participation and review.

If enacted, KRA would be empowered to use enforcement tools such as agency notices, garnishee orders, and asset preservation measures to recover pension deductions withheld by employers but not remitted to retirement schemes.

The proposed changes are expected to tighten compliance, particularly in sectors where delayed or unpaid pension remittances have remained a persistent challenge despite deductions being made from employees' salaries.

Supporters of the proposal argue that stronger enforcement is necessary to safeguard workers' retirement benefits and curb misuse of statutory deductions.

However, some employers and business groups are expected to raise concerns that extending KRA's recovery powers beyond traditional tax collection could increase compliance pressures, especially for firms facing cash flow constraints.

The Bill is currently undergoing public participation, with stakeholder submissions expected to inform committee deliberations before it advances to the next stage of the legislative process.

If approved, the amendments would significantly broaden KRA's role in enforcing statutory deductions, positioning the authority as a key player in the recovery of unremitted pension contributions.

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