Bankers Challenge Ruto’s PAYE Strategy, Demand Tax Relief for All Workers

The Kenya Bankers Association (KBA) has called for a five-percentage-point reduction in Pay As You Earn (PAYE) tax across all income brackets, putting forward a broader tax relief proposal than President William Ruto’s latest plan targeting low-income earners.

KBA Chief Executive Officer Raimond Molenje made the proposal on Thursday, October 22, arguing that workers across different salary levels should benefit from lower taxes rather than limiting relief to those earning the least.

The proposal differs from Ruto’s plan to exempt workers earning KSh32,333 or less per month from PAYE. If adopted, the president’s proposal would offer relief to employees within that income range, while KBA wants the reduction extended to all workers.

Speaking during the release of the 2025 Total Tax Contribution Report, Molenje said the proposed tax adjustment should be considered as part of wider efforts to rebuild public confidence in government.

He argued that reducing PAYE was not simply about increasing the amount of money employees take home at the end of the month, but also about strengthening the relationship between taxpayers and the state.

“As we make Pay As You Earn adjustments, let’s consider how we can help Kenyans restore trust in their government. The proposed 5% tax cut for all workers is not merely about putting more money in people’s pockets,” Molenje said.

The KBA chief executive added that wider tax relief could encourage Kenyans to continue contributing to the economy, linking the proposed changes to both household finances and public confidence. PAYE is deducted from employees’ salaries and remitted to the Kenya Revenue Authority (KRA).

The amount paid depends on an employee’s taxable income and the applicable tax bands. A reduction across all income brackets would affect workers beyond the lowest-paid category, although the actual benefit would depend on how the proposal is structured and implemented.

The bankers’ proposal adds to the debate over how the government can ease the cost of living while maintaining revenue needed to finance public services and development programmes.

However, the KBA’s call remains a proposal, and the available information does not indicate that the government has adopted the suggested five-percentage-point reduction.

LINK: https://www.kenyans.co.ke/news/128770-bankers-push-paye-cut-all-workers-ruto-targets-low-earners?fbclid=IwY2xjawVGqclleHRuA2FlbQIxMQBwZG9mBHNydGMGYXBwX2lkDzQwOTk2MjYyMzA4NTYwOQABHmh-ERK0TfmiJylqnKUtSAkSGsFDtOjg7I76x1nC3UuhtKJuDDo4TdUfWHjV_aem_kNcCFYpMfyMPlL1vrxuKHQ

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