President William Ruto has announced a major review of taxes deducted from the payslips of salaried Kenyans, revealing plans to exempt low-income earners earning up to Ksh30,000 from paying Pay As You Earn (PAYE) tax.

🇰🇪 Breaking It Down

Speaking during the National Prayer Breakfast on Thursday, May 28, Ruto said the government was seeking to ease the financial burden on low-income workers amid the high cost of living.

He disclosed that he had directed the National Treasury to develop proposals to remove PAYE deductions for workers earning up to Ksh30,000 monthly, up from the current threshold of Ksh24,000.

“I told the Treasury that it is time to look at how we can slow down, especially for the low-income earners, and remove some taxes from them,” Ruto disclosed.

📌 What You Need to Know

"That is why we will be putting a proposal before parliament to say that all the low-income earners, the people who earn up to Ksh24,000, have been paying PAYE at 10 per cent, and we are saying they will not pay anymore."

Under the proposed changes, employees earning Ksh30,000 and below will no longer pay PAYE, effectively increasing their take-home pay if Parliament approves the proposal.

Currently, workers earning from Ksh24,000 are subjected to PAYE at a rate of 10 per cent, but this is going to change once the proposal is approved.

The President noted that while the move will create a revenue deficit of Ksh40 billion, the government is exploring alternative and more innovative ways to drive the economy without heavily burdening low-income earners through taxation.

The Head of State defended the proposal as part of broader economic reforms aimed at protecting vulnerable Kenyans while leveraging the country’s human resource potential to spur growth.

The announcement came days after various stakeholders, including the Kenya Bankers Association (KBA) raised concerns over multiple deductions on workers’ payslips, demanding a review of PAYE for all salaried Kenyans.

📰 Source: Kenyans.co.ke