The government is considering a rare tax reprieve for low-income workers, a move that could leave millions of Kenyans with more money in their pockets each month.
Speaking in Meru on Monday, Treasury Cabinet Secretary John Mbadi said he plans to push for a full Pay As You Earn (PAYE) exemption for salaried workers earning Sh30,000 or less. The proposal, he said, will be taken to Parliament once it resumes.
CS Mbadi made the announcement at the People’s Dialogue Forum, striking a tone that mixed urgency with reassurance. The CS told the crowd that the government has no plans to raise taxes further as households struggle with the cost of living.
“What we are saying is simple, we will not tax you more. In fact, we are now thinking of reducing taxes,” said Mbadi.
The proposal follows consultations with President William Ruto, who, according to Mr Mbadi, has given the green light for the plan to be fast-tracked through Parliament.
“Let me announce this here, we have agreed with President William Ruto that low-income earners in this country should be given a reprieve,” said CS Mbadi.
If approved, the change would exempt all salaried workers earning Sh30,000 and below from PAYE. Treasury estimates show Kenya has just over three million salaried employees, with roughly half of them falling within that income bracket.
“Anyone earning Sh30,000 and below should pay zero,” Mr Mbadi said. “The government should come for my money and leave the person earning Sh30,000 alone.”
Unusually, the Treasury is not waiting for the annual Finance Bill in June. Mr Mbadi said he will instead table a Tax Laws (Amendment) Bill as soon as Parliament resumes.
The proposal goes further. Workers earning between Sh30,000 and Sh50,000 would see their tax rate reduced from 30 per cent to 25 per cent. Under the plan, someone earning Sh50,000 would pay no tax on the first Sh30,000, with the remaining Sh20,000 taxed at the lower rate.
“That is a reduction of five per cent,” Mr Mbadi said. “We are trying to put some money in your pocket.”
Treasury estimates that about 244,000 additional workers would benefit from the reduced rate, bringing the total number of Kenyans receiving some form of tax relief to around 1.7 million.
The government’s message, however, was not all relief. Mr Mbadi said efforts would intensify to bring informal and non-salaried earners into the tax net, arguing that fairness demands broader compliance.
“If you are making Sh100,000 just because you are not on payroll, you should not run away from paying tax,” he said. “You are using the same roads.”
He stressed that enforcement would rely more on data and systems than on intimidation. The Kenya Revenue Authority, he said, would focus on identifying income through technology rather than force.
“Taxation is not military,” Mr Mbadi said. “KRA will use systems and tell you: we have seen you, start paying tax.”
The proposal now shifts to Parliament, where lawmakers will weigh the promise of relief for low earners against the pressure of funding a stretched national budget.
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