As the 2027 general election looms, the Kenyan government has unveiled a bold proposal to scrap Pay As You Earn (PAYE) tax for low-income workers and reduce the rate for others — a move that many analysts say is as much political as it is economic.
Under the proposed amendments to the Income Tax Act, the government wants to remove PAYE entirely for the roughly 1.5 million workers earning Sh30,000 and below. In addition, about half a million Kenyans earning between Sh30,000 and Sh50,000 would see their PAYE rate cut from 30 per cent to 25 per cent.
Treasury officials say the reforms are aimed at easing the burden on ordinary workers hit hard by rising living costs. But the timing — barely 18 months before the 2027 polls — has raised questions among opposition leaders, economists and labour unions about the political motives behind the tax shift.
From tax hikes to tax cuts
When President William Ruto took office in September 2022, his first budgets included a series of tax increases — including higher PAYE brackets in ways that critics said disproportionately affected low- and middle-income earners. That, combined with a broader raft of new levies on goods and services, fuelled public anger and widespread perception that “the taxman had become heavier.”
Kenya’s reliance on PAYE as a major revenue source — deducted straight from workers’ pay before they see a shilling — has long been a flashpoint. Workers earning close to the minimum wage have complained that after PAYE and statutory deductions, little remains to cover essentials like transport, rent, school fees and food.
Now, with a tax relief proposal on the table, political analysts see a clear link to the urgency of building goodwill among the working class.
“Cutting PAYE at this stage is not just an economic decision,” said governance expert Dr. Mercy Mumo. “It’s a calculated political signal — an attempt to ease voter dissatisfaction with the high cost of living and regain support among disciplined workers who felt squeezed after the Ruto government’s earlier tax hikes.”
Critics have been quick to frame the proposal as a pre-election maneuver.
“Relief after taxes were raised is welcome,” said a senior opposition figure. “But we cannot ignore the context — these measures come at a time when the government is desperate to win back the working class ahead of 2027.”
Labour unions have also noted the political context, welcoming the proposed PAYE relief while urging workers to remain vigilant.
Economists caution that while PAYE relief could put more money in workers’ pockets, it will not address deeper economic pains such as inflation, high borrowing costs, and stagnant wages — factors analysts say weigh heavily on voter sentiment.
There is also the unresolved question of how the government plans to make up for the revenue loss from lower PAYE collections. PAYE is one of the single largest contributors to the Treasury, funding hospitals, schools, security and infrastructure.
“Revenue forgone has to be replaced somewhere,” said economist James Maina. “If not from spending cuts, the State might shift the burden to other taxes or borrowing — which again affects the working class indirectly.”
Public Reaction: Ni Faya — Ama Si Faya?
In markets, offices and on social media, Kenyans have been debating the proposal under the taglines of relief and skepticism — “ni faya” for relief, “si faya” for suspicion.
For many low-income earners, the news of PAYE removal stirs hopes of better take-home pay. But others are wary, asking whether relief on paper will translate into real change in their bank accounts.
With the 2027 polls on the horizon, politics and economics are now inseparable in the debate over PAYE — and millions of working Kenyans are left to decide whether this proposed tax cut is genuine relief or simply another election gambit.
