President William Ruto has announced a proposed tax relief plan aimed at reducing the financial burden on low-income earners in Kenya. Speaking during the National Prayer Breakfast on May 28, 2026, the President revealed that he had directed the National Treasury to prepare a proposal that would exempt salaried Kenyans earning Ksh30,000 and below from paying Pay As You Earn (PAYE) tax.
If approved by Parliament, the proposal would raise the current PAYE exemption threshold from Ksh24,000 to Ksh30,000, allowing millions of workers to take home more income every month.
What the Proposal Means
Currently, employees earning above Ksh24,000 are subjected to PAYE deductions at a rate starting from 10 percent. Under the new proposal, workers earning up to Ksh30,000 monthly would no longer pay PAYE tax.
The government believes this move could provide much-needed relief to households struggling with the rising cost of living.
President Ruto stated that the government wants to “slow down” taxation on low-income earners and explore alternative ways to stimulate economic growth without heavily burdening ordinary Kenyans.
Additional Tax Relief for Middle-Income Earners
Apart from removing PAYE for those earning below Ksh30,000, reports also indicate that the government is considering reducing PAYE rates for workers earning between Ksh30,000 and Ksh50,000. The proposed reduction would lower the tax rate from 30 percent to 25 percent.
This adjustment could further increase disposable income for many salaried Kenyans.
What Happens Next?
-The proposal is yet to be formally presented and debated in Parliament. Treasury officials are currently conducting further assessments before the changes can be included in the Finance Bill 2026 or a separate Tax Laws Amendment Bill.
If approved, the changes could affect millions of salaried Kenyans and significantly reshape the country’s income tax structure.
As discussions continue, many workers across the country will be watching closely to see whether the proposed PAYE relief becomes a reality.