President William Ruto has overruled Treasury concerns and approved sweeping tax relief for Kenya’s low-income workers. Speaking at the National Prayer Breakfast at Safari Park in Nairobi, Ruto announced that workers earning up to Sh30,000 monthly will no longer pay Pay As You Earn (PAYE) tax.
The decision comes despite Treasury warnings that the move could cost the government Sh40 billion in lost revenue. Treasury Cabinet Secretary John Mbadi had previously expressed reservations, stating the proposal was still under review and didn’t feature in the Finance Bill 2026. However, Ruto was adamant: “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.’”
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 be completely exempt from income tax. The relief is expected to put between Sh731 and over Sh2,000 back into workers’ pockets monthly, depending on income levels.
The government also plans to widen the personal income tax base to offset revenue losses and lower the 30% tax bracket to 25% for middle-income earners. This represents a significant policy shift aimed at easing the financial burden on Kenya’s working class, who have faced increased cost of living pressures.
For Kenyans managing tight budgets, this tax relief couldn’t come at a better time. Consider using financial planning tools and budgeting apps to maximize these savings and build an emergency fund. Read the full story on Nairobi Wire: https://nairobiwire.com/2026/05/ruto-paye-tax-relief-low-income-earners-sh30000-kenya-2026.html