Ruto’s Tax Relief Plan: Kenyans Earning Below KSh32,333 Could Stop Paying PAYE

The National Treasury is preparing to introduce proposed tax changes that could exempt workers earning KSh32,333 or less per month from Pay As You Earn (PAYE) tax.

The proposal is part of President William Ruto’s tax relief plan announced during his Mashujaa Day address. According to Daily Nation’s report published on October 26, 2026, the National Treasury expects the Tax Laws (Amendment) Bill, 2026, to be presented to Parliament next week, subject to Cabinet approval.

If approved in its proposed form, the changes could increase the take-home pay of lower-income earners struggling with the rising cost of living.

Under the current PAYE structure, monthly income up to KSh24,000 falls within the lowest tax bracket, which is taxed at 10 per cent.

The proposed changes would raise the tax-free threshold to KSh32,333 per month, potentially allowing more formal-sector workers to retain a larger share of their earnings.

The government says the measures are intended to ease financial pressure on households and improve disposable income.

However, the proposal is not yet law. Parliament must consider the Bill, and its final provisions could change during the legislative process.

The proposed package also seeks to remove import duty on mobile phones, a move that could reduce costs for importers and potentially lower retail prices for consumers.

Another proposal would exempt property transactions valued at KSh1 million or less from stamp duty, reducing some of the costs associated with purchasing smaller properties.

The government will need to amend relevant legislation before these measures can take effect.

While the proposals could provide relief to households, the government faces the challenge of implementing tax reductions while funding public services and managing a budget deficit estimated at KSh1.2 trillion.

Treasury officials are considering ways to offset the anticipated revenue losses, including reviewing personal tax relief and other exemptions.

This means some taxpayers could benefit from the revised tax bands while others face changes to existing tax benefits.

The final impact will depend on the legislation approved by Parliament and the implementation measures adopted by the government.

For now, workers should continue using the existing tax rules until official changes are enacted.

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