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.
Mbadi made the clarification during a Finance Bill 2026 briefing on 11 May, reassuring the public that the administration has not abandoned its pledge to provide relief for salaried workers earning below KSh 50,000. A final decision is expected before 30 June, ahead of the bill’s passage.
“Before the public participation process ends, we will make a decision. Before June 30 and before the Finance Bill is passed, the government is likely to propose amendments to align PAYE with our earlier proposal,” Mbadi said.
Simulations indicate the change could create an annual revenue shortfall of about KSh 35 billion. The proposal was missing from the initial draft, raising public concerns that it had been shelved. This follows February statements by Treasury Principal Secretary Chris Kiptoo, who tied any tax cuts—including PAYE reductions—to expansion of the tax base.