In a bold move that will bring relief to millions of low-income earners, President William Ruto has overruled Treasury concerns and approved the elimination of PAYE tax for workers earning up to Sh30,000 monthly.
Speaking at the National Prayer Breakfast at Safari Park in Nairobi, Ruto confirmed that despite Treasury warnings about a Sh40 billion budget impact, the government will proceed with the tax relief plan. “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,’” the President stated.
Currently, workers earning up to Sh24,000 pay PAYE at 10%. Under the new directive, this group—along with those earning up to Sh30,000—will pay no income tax at all. The move comes after Treasury CS John Mbadi had indicated the relief wouldn’t feature in the Finance Bill 2026 due to revenue concerns.
According to projections, workers could see net pay gains ranging from Sh731 to over Sh2,000 depending on their income levels. The proposals also suggest lowering the 30% tax bracket to 25% for middle-income earners, providing broader relief across the income spectrum.
For those looking to maximize their savings from this tax relief, consider investing in personal finance tools like budgeting apps or financial literacy books to make the most of your increased take-home pay.
This development marks a significant shift in Kenya’s tax policy, prioritizing the welfare of low-income workers despite fiscal pressures. You can read the full story at Nairobi Wire: https://nairobiwire.com/2026/05/ruto-paye-tax-relief-low-income-earners-sh30000-kenya-2026.html
The implementation details and timeline remain to be announced, but this represents welcome news for millions of Kenyan workers struggling with the high cost of living.