President William Ruto has overruled Treasury objections to provide major tax relief for Kenya’s low-income earners. Speaking at the National Prayer Breakfast at Safari Park in Nairobi, Ruto announced that workers earning up to Sh30,000 will no longer pay PAYE tax, a move that will cost the government an estimated Sh40 billion.
The decision comes despite Treasury CS John Mbadi’s concerns about revenue loss and budget strain. “The Treasury came back and said, ‘Oh, Mr. President, you know this is going to be very big. You know it’s going to cost us Sh40 billion in this budget.’ I told them, ‘Let’s do it. Let’s do it,’” Ruto declared.
Currently, workers earning up to Sh24,000 pay PAYE at 10%. Under the new relief, this group and those earning up to Sh30,000 will be completely exempted from income tax. The proposals also suggest lowering the 30% tax bracket to 25% for middle-income earners, with workers potentially seeing net pay gains between Sh731 and over Sh2,000 depending on income levels.
Treasury CS Mbadi had earlier stated that the PAYE relief didn’t feature in the proposed Finance Bill 2026, citing the need for simulations and assessment of economic impacts. The government plans to widen the personal income tax base to offset the revenue loss from this relief measure.
This bold move signals Ruto’s commitment to easing the tax burden on ordinary Kenyans, particularly those struggling with the high cost of living. For more details on this developing story, read the full report at Nairobi Wire (https://nairobiwire.com/2026/05/ruto-paye-tax-relief-low-income-earners-sh30000-kenya-2026.html).
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