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.

President William Ruto has signed three bills into law aimed at easing business costs and attracting investment. The measures target tax changes for companies, special economic zones, and the Konza Technopolis.

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As the public comment period for the Finance Bill 2026 neared its end on Monday evening, Kenyan youth turned to social media to analyze proposed taxes.

President William Ruto has ordered the revival of school fees payments through the e-Citizen system to boost transparency. Experts and parents complain the move ignores rural economic realities.

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The World Bank has outlined three regulatory conditions Kenya must meet by June 30 to secure a Ksh96.9 billion budget support loan. The funds will support salaries and daily government operations. The requirements follow Kenya's request for aid amid fuel supply disruptions and external shocks from the Middle East conflict.

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