KRA Could Soon Chase Employers Who Fail to Remit Workers’ Pensions

The Kenya Revenue Authority (Amendment) Bill, 2026 proposes to give KRA the power to recover pension contributions that employers deduct from workers’ salaries but fail to remit to retirement schemes. The change would place these arrears under the Kenya Revenue Authority Act, allowing the taxman to pursue them with the same collection tools it uses for unpaid taxes

For employers
Defaulting employers risk frozen bank accounts, seized assets and deactivated tax PINs. KRA could also issue garnishee orders, compelling a defaulter’s bank to release funds directly towards the arrears. The proposals would therefore give the taxman powerful tools to pursue unpaid pension deductions. Data also suggests the problem is concentrated in public sector which accounts for 93% of the Sh66.41 billion in unremitted contributions as of December 2025, while private employers account for 7%. For public sector institutions, the problem is often delayed Treasury disbursements, which hinder the timely remittance of pension contributions.
The irony: one government agency would now be chasing another, when the real problem is delayed Treasury funding, not unwilling employers.

For workers
Every month those funds remaining unremitted, workers lose the benefit of compounding returns, weakening their retirement savings over time. Whether KRA’s involvement finally changes public sector behaviour will be the key test to watch.