President William Ruto has signaled major tax relief for formally employed Kenyans, revealing plans to exempt workers earning below Ksh30,000 from Pay As You Earn (PAYE) tax.
The announcement comes a day after Treasury Cabinet Secretary John Mbadi disclosed that the government is seeking to exempt more than 1.5 million employed Kenyans earning below the Ksh30,000 threshold from PAYE.
Speaking on Wednesday while meeting United Democratic Alliance (UDA) aspirants at State House, President Ruto said his administration will table a proposal in Parliament aimed at reducing the tax burden on low- and middle-income earners.
“When Parliament resumes next week, we will present a proposal that every Kenyan earning less than Ksh30,000 will not pay any taxes because we have steadied the economy,” Ruto said.
The President further announced that workers earning up to Ksh50,000 will also benefit from tax relief, with their PAYE rate set to be reduced from 30 percent to 25 percent.
“Any Kenyan who earns up to Ksh50,000, we are reducing their taxes from 30 percent to 25 percent. About 1.5 million Kenyans will not pay any taxes, and another 500,000 Kenyans will have their taxes reduced,” he added.
Ruto said the proposed measures are part of his administration’s broader strategy to ease financial pressure on salaried workers and lower the cost of living, which has strained many households.
He argued that such reforms would not have been possible without stabilizing the economy, noting that his government remains focused on addressing persistent cost-of-living challenges.
Meanwhile, Treasury CS John Mbadi said the Ministry of National Treasury will present the Tax Laws Amendment Bill to Parliament to secure approval for the proposed reforms ahead of the publication of the Finance Bill 2026.
According to Treasury data, Kenya has approximately 3,650,165 salaried workers, with about 1.5 million earning Ksh30,000 and below, who stand to benefit directly from the proposed PAYE exemption.
If approved, the tax changes would mark one of the most significant PAYE relief measures in recent years, targeting low- and middle-income earners.
