In a significant move for low-income earners, President William Ruto has overruled Treasury concerns to eliminate PAYE tax for workers earning up to Sh30,000 monthly. Speaking at the National Prayer Breakfast at Safari Park in Nairobi County, Ruto confirmed the tax relief will proceed despite Treasury warnings about a Sh40 billion budget impact.
The president revealed that Treasury Cabinet Secretary John Mbadi had initially expressed reservations about the proposal’s financial implications. However, Ruto insisted on moving forward with the plan, stating, “The Treasury came back and said this is going to cost us Sh40 billion in this budget. I told them, let’s do it.”
Currently, workers earning up to Sh24,000 pay PAYE at 10%. Under the new proposal, this group along with those earning up to Sh30,000 will be completely exempt from income tax. The relief is expected to benefit millions of low-income workers across Kenya who have struggled with the rising cost of living.
Treasury CS Mbadi had previously stated that the PAYE relief did not feature in the proposed Finance Bill 2026, citing the need for simulations and assessments of the overall economic impact. The government is also exploring ways to widen the personal income tax base to offset the revenue loss from this exemption.
Additional proposals include lowering the 30% tax bracket to 25% for middle-income earners, which could see workers gaining between Sh731 and over Sh2,000 in net pay depending on their income levels. This tax relief represents a major policy shift aimed at easing the financial burden on Kenya’s working class.
For more details on this developing story, visit the original report at https://nairobiwire.com/2026/05/ruto-paye-tax-relief-low-income-earners-sh30000-kenya-2026.html
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