Treasury reassures public on PAYE tax relief despite absence from budget

National Treasury Cabinet Secretary John Mbadi has reassured Kenyans that the proposed PAYE tax relief for low earners remains on track, even though it was omitted from the Finance Bill 2026.

Speaking after presenting the 2026/27 budget in Parliament on Thursday, June 11, Mbadi said the absence from the bill should not be seen as a reversal. He noted that the government is still completing data analysis on the proposal.

"Even if it is not in the Finance Bill, it is not off the table," Mbadi stated. "We have committed. This government is not going to lie. Wait for that commitment."

President William Ruto had earlier directed the Treasury during the National Prayer Breakfast on May 28 to develop plans raising the relief threshold to KSh 30,000 per month from the current KSh 24,000. Mbadi confirmed the pledge will be implemented once the analysis is finalised.

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Treasury Cabinet Secretary John Mbadi reviewing PAYE tax relief documents in a government office
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Mbadi: PAYE tax relief proposal still under active consideration

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Treasury Cabinet Secretary John Mbadi has confirmed that the government’s earlier proposal to raise the PAYE tax-free threshold from KSh 24,000 to KSh 30,000 remains under consideration, despite its absence from the draft Finance Bill 2026.

Treasury Cabinet Secretary John Mbadi has clarified that the Finance Bill 2026 does not introduce new taxes on cryptocurrency, bread or mobile money transactions.

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The Law Society of Kenya has urged Parliament to lower Pay As You Earn rates and introduce a tax-free threshold of Ksh30,000 per month in the Finance Bill 2026.

Labour Cabinet Secretary Alfred Mutua signed legal notices on May 7 effecting a 12 percent rise in general minimum wages and 15 percent for agricultural workers. The move follows President William Ruto's Labour Day announcement and aims to address rising living costs.

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Three days after President William Ruto's Labour Day announcement of a 12% wage increase for all workers and 15% minimum wage hike for agricultural sector employees, workers must wait for legal steps before changes take effect in payslips.

A youth lobby has petitioned Parliament to create a KSh 300 billion supplementary budget for the 2026/27 financial year to tackle youth unemployment.

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Agriculture Minister Mutahi Kagwe has assured tea farmers that the new 0.8 percent export tax will not reduce their earnings.

 

 

 

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