Ruto Proposes Tax Relief for Workers Earning Below Ksh30,000
President William Ruto has announced plans to introduce sweeping tax relief measures targeting formally employed Kenyans, in a move aimed at easing the financial burden on low–income households. The Head of State revealed that his administration will table a proposal in Parliament seeking to exempt workers earning below Ksh30,000 from Pay As You Earn (PAYE) tax and reduce the rate for those earning up to Ksh50,000.
The announcement follows remarks made by Treasury Cabinet Secretary John Mbadi, who disclosed that the National Treasury is preparing reforms that could benefit more than 1.5 million salaried Kenyans currently within the lower income bracket.
Proposal to Be Tabled in Parliament
Speaking at State House on Wednesday while meeting United Democratic Alliance (UDA) aspirants, President Ruto stated that the government had stabilized the economy sufficiently to allow for meaningful tax reductions.
“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,” the President said.
He added that employees earning between Ksh30,000 and Ksh50,000 would also benefit from a reduced PAYE rate, dropping from the current 30 percent to 25 percent.
“Any Kenyan who earns up to Ksh50,000, we are reducing their taxes from 30% to 25%. About 1.5 million Kenyans will not pay any taxes and another 500,000 will have their taxes reduced,” Ruto explained.
Easing the Cost of Living
The President linked the planned reforms to his broader agenda of lowering the cost of living, which has remained a major concern for Kenyan households over the past few years. He argued that the tax cuts would increase disposable income for workers and stimulate economic activity.
Ruto maintained that such relief would not have been possible without the fiscal discipline measures his administration has implemented since taking office.
“This move would not have been achieved if we had not set the foundation right. Our focus remains on taming the persistent cost-of-living pressures affecting millions of families,” he said.
Treasury Preparing Tax Laws Amendment Bill
Treasury CS John Mbadi confirmed that the Ministry is finalizing the Tax Laws Amendment Bill, which will be presented to Parliament for approval before the publication of the Finance Bill 2026.
Mbadi noted that the reforms are designed to protect low-income earners while still safeguarding government revenue. According to data from the National Treasury, Kenya has approximately 3,650,165 salaried workers, with about 1.5 million earning Ksh30,000 and below.
The CS explained that exempting this group from PAYE would provide immediate relief without significantly destabilizing revenue collection.
Who Stands to Benefit?
If Parliament approves the proposal:
- Workers earning below Ksh30,000 will pay zero PAYE
- Those earning between Ksh30,000 and Ksh50,000 will see PAYE drop from 30% to 25%
- An estimated 2 million employees will enjoy either full exemption or reduced taxation
Economists say the policy could boost consumer spending, particularly in urban centers where salaried workers have struggled with rising food, rent, and transport costs.
Mixed Reactions from Stakeholders
The proposal has already sparked debate among policymakers and financial analysts. Supporters argue that the move is long overdue and will cushion vulnerable households. Critics, however, warn that reduced PAYE collections could widen the budget deficit unless accompanied by strict expenditure controls.
Labour groups have welcomed the announcement, saying it reflects concerns they have raised for years about the shrinking take-home pay of Kenyan workers.
“This is a positive step. Many employees survive on salaries that are heavily taxed, leaving little to cater for basic needs,” said an official from a workers’ union.
Next Steps
The fate of the tax relief now lies with Parliament, where lawmakers will debate the Tax Laws Amendment Bill in the coming weeks. Should it pass, the changes could take effect before the end of the year, offering the first major PAYE reprieve in recent times.
For millions of Kenyan workers, the proposal represents a glimmer of hope amid tough economic times and signals a shift toward more people-centered fiscal policies.