Good News For All Kenyans as President Ruto Makes Major Changes in Paying Taxes

President William Ruto has announced a proposal to exempt low-income salaried Kenyans from Pay As You Earn (PAYE) tax, a move that would raise the tax-free threshold from KSh 24,000 to about KSh 32,000 a month.

He made the announcement on Tuesday, October 20, during the 2026 Mashujaa Day celebrations at Kipchoge Keino Stadium.

“We have prepared a proposal to exempt Kenyans earning KSh 32,333 per month or less from paying PAYE,” he said.

Under the current framework, employees pay 10% on the first KSh 24,000 of monthly taxable income, while earnings between KSh 24,001 and KSh 32,333 are taxed at 25%.

A personal relief of KSh 2,400 a month means workers earning up to KSh 24,000 already pay no PAYE, but those just above that level still face deductions.

If enacted, the proposal would free hundreds of thousands of additional workers from income tax and increase their take-home pay. That would ease pressure on households struggling with the cost of living.

The announcement follows earlier signals from Treasury Cabinet Secretary John Mbadi, who had said the government was considering changes to the PAYE structure to lighten the burden on low earners.

Mbadi had indicated that the Treasury was open to reforming the income tax bands, though no specific figures had been formally committed at the time.

The president’s declaration is a firmer political commitment and raises expectations that the measure could feature in an upcoming Finance Bill.

It still requires parliamentary approval before taking effect. Lawmakers are expected to weigh the relief for workers against the revenue the government would lose.

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