Treasury Proposes Tax Relief for 3.5M Kenyans Earning Ksh30K

The National Treasury has proposed a major tax break that could leave millions of low-income workers with more money in their pockets every month.

Treasury Cabinet Secretary John Mbadi says the government wants to raise the tax-free income level from Sh24,000 to Ksh 30,000. If the proposal is approved, Kenyans earning Ksh 30,000 or less would no longer be required to pay Pay As You Earn (PAYE).

Speaking during a Budget and Privatisation Public Engagement Forum at Kiambu National Polytechnic, Mbadi said it is unfair to keep taxing people who are already struggling with the high cost of living.

“This is a survival wage. It is not the kind of income where the government should still be seeking to levy taxes,” he said.

Mbadi argued that Ksh 30,000 a month is barely enough for basic needs such as rent, food, transport and school fees, leaving many families with almost nothing left at the end of the month.

He said the planned changes are expected to benefit about 3.5 million salaried workers, especially those in the lowest income brackets.

The Treasury is also considering reducing tax rates for workers earning up to Ksh 50,000, meaning more relief for lower and middle-income households who have been hit hard by rising expenses.

Mbadi said the government believes putting more cash in the hands of workers at the lower end of the pay scale will increase spending in local markets and boost small businesses, farmers and traders who depend on daily consumer demand.

He added that the plan has the support of President William Ruto and is part of a shift toward policies meant to ease pressure on ordinary Kenyans ahead of the 2026/2027 budget cycle.

To cover the revenue gap that may come from the tax cuts, Mbadi said the government will speed up the privatisation of some state-owned firms and also strengthen tax collection through better technology and administrative reforms.