Low- and middle-income earners in Kenya are set to receive significant tax relief following a government proposal aimed at easing the financial burden on salaried workers amid the rising cost of living.
Treasury Cabinet Secretary John Mbadi has announced plans to introduce amendments to the Tax Law Amendment Bill, which will seek to reduce or abolish income tax for workers earning lower monthly wages.
Proposed PAYE Changes
Speaking on Monday, Mbadi said the government has agreed with President William Ruto to provide relief to low-income earners by adjusting the Pay As You Earn (PAYE) structure once Parliament resumes.
“We have agreed with President William Ruto that low-income earners should be given a reprieve, and to this effect, I am preparing to take a proposal to Parliament on the Tax Law Amendment Bill once it resumes,” Mbadi said.
Under the proposed changes:
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Workers earning below Sh30,000 per month will be exempted from income tax
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Employees earning between Sh30,000 and Sh50,000 will have their PAYE rate reduced from 30 per cent to 25 per cent
Boost to Disposable Income
According to the National Treasury, the initiative is designed to increase disposable income for low- and middle-income earners, helping households cope with rising living costs while stimulating consumer spending in the economy.
Treasury officials say the move is part of broader fiscal reforms aimed at making the tax system more equitable and supportive of vulnerable workers.
Announcement Made During Public Forum
Mbadi announced the Budget and Privatisation Public Engagement Forum for the Upper Eastern region, held at Meru National Polytechnic.
The forum brought together stakeholders from Embu, Tharaka Nithi, Meru, Isiolo, and Marsabit counties, as part of public participation in the 2026 budget-making process.
The proposed tax changes are expected to be debated in Parliament once lawmakers resume sittings, with millions of salaried Kenyans likely to benefit if the bill is passed.
