- President William Ruto announced a proposal to exempt low-income earners from PAYE during Mashujaa Day celebrations in Eldoret
- Kenyans earning below KSh 32,000 monthly would no longer be required to pay income tax under the proposed plan
- Treasury CS John Mbadi had earlier floated a similar tax relief proposal targeting low-income salaried workers
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TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting, offering insights into Kenyan and global economic trends.
President William Ruto has proposed scrapping Pay As You Earn (PAYE) tax for all salaried Kenyans earning less than KSh 32,000 per month, in a move he described as essential relief for low-income workers.
Source: Twitter
Ruto made the announcement on Tuesday, October 20, during the 2026 Mashujaa Day celebrations held at Kipchoge Keino Stadium in Eldoret.
The proposal, if enacted, would free a significant portion of Kenya's workforce from monthly income tax deductions, leaving them with higher take-home pay.
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"We have prepared a proposal to exempt Kenyans earning KSh 32,333 per month or less from paying PAYE," Ruto announced.
What is the impact on low-income earners?
Under the current PAYE framework, employees pay 10% on the first KSh 24,000 of their monthly taxable income. Workers earning between KSh 24,001 and KSh 32,333 are charged 25% on that portion of their income.
A personal relief of KSh 2,400 per month effectively ensures that those earning up to KSh 24,000 pay no PAYE, but workers earning just above that threshold continue to face deductions.
Ruto's proposal would raise the tax-free threshold to KSh 32,000, meaning hundreds of thousands of additional workers would be fully exempt from income tax. The change would translate directly into increased disposable income for those in the lower wage brackets, easing pressure on households already struggling with the cost of living.
Treasury CS John Mbadi's earlier proposal
The president's announcement follows a similar push by Treasury Cabinet Secretary John Mbadi, who had previously indicated that the government was considering adjustments to the PAYE structure to reduce the burden on low earners.
Mbadi had signalled that the Treasury was open to reforming the income tax bands as part of broader fiscal planning, though specific figures had not been formally committed to at that stage.
Ruto's Mashujaa Day declaration represents a firmer political commitment to that direction, placing the proposal more squarely in the public domain and raising expectations that it could feature in an upcoming Finance Bill.
The proposal still requires parliamentary approval before it can take effect. It remains to be seen how legislators will weigh the relief for workers against the revenue shortfall the exemption would create for the government.
Source: TUKO.co.ke