Treasury Cabinet Secretary John Mbadi has announced plans to introduce a Bill in Parliament to exempt employees earning Sh32,800 and below from Pay As You Earn (PAYE) tax.
Mbadi said the proposed amendment, expected to be presented to Parliament in November, aims to ease the financial burden on low-income households and ensure that economic recovery translates into improved livelihoods.
“In the month of November, we are bringing that amendment to Parliament to tell those Kenyans that we appreciate the sacrifices, however little or however big you have made,” he said.
The CS spoke on Friday at The Eldoret National Polytechnic in Eldoret, Uasin Gishu County, where he presided over the opening of the Mashujaa Day 2026 Economy (Finance) Thematic Week, held under the theme “An Economy for the People”.
Mbadi also said the government was targeting economic growth of about five per cent to create jobs, particularly for young people.
He noted that the economy grew by 5.1 per cent in both the first and second quarters of 2026, up from 4.6 per cent in 2025.
He attributed the growth to government measures to stabilise the economy amid global challenges, including pressure on the foreign exchange market and rising international fuel prices.
“It is my firm commitment that we are going to do whatever is possible that we can do to make sure that we steady our economy at about 5% to be able to create job opportunities for our young people,” he said.
On the cost of living, Mbadi attributed recent inflationary pressures to rising transport costs, higher wheat prices and reduced milk production associated with prolonged dry conditions.
He said the government had retained Value Added Tax (VAT) on fuel at eight per cent, half the standard rate of 16 per cent, for a further 90 days to cushion consumers against rising fuel prices linked to the conflict in the Middle East.
The tax relief had resulted in about Sh54 billion in foregone revenue over six months, with the figure expected to exceed Sh100 billion over a full year if the relief continued, he said.
“Every Kenyan feels this, from the boda boda rider and the mama mboga, to the farmer taking maize to market and the family that cooks with kerosene,” he said.
Mbadi acknowledged that many households continued to face financial difficulties despite improvements in key economic indicators, saying economic stability must translate into better living standards.
“Our task in the next phase, together with my team, is to turn stability into prosperity that every household can feel,” he said.
The CS said Kenya’s foreign exchange reserves had increased from 2.3 months of import cover in 2022 to 6.1 months, strengthening the country’s ability to withstand external shocks and meet international financial obligations.
He added that government borrowing costs had declined from about 16 per cent to below nine per cent, while average commercial bank lending rates to the private sector had fallen from 17.2 per cent to 14.4 per cent.
Mbadi also outlined major road infrastructure projects aimed at improving connectivity, facilitating trade and stimulating economic growth, particularly in Western Kenya and the Rift Valley.
He said the government had addressed outstanding payments to road contractors that had stalled construction under the previous administration, enabling work to resume on projects across the country.
The projects include the Rironi–Mau Summit Road, the Mau Summit–Eldoret–Malaba highway, the South Rift Lake Region Gateway Corridor, the Great Highlands Connections Corridor and the Lake Victoria Ring Road.
Mbadi said the 253-kilometre South Rift Lake Region Gateway Corridor had been finalised with the World Bank, with funding expected the following month and the project scheduled for launch before the end of the year.
The road is expected to traverse Nakuru, Kericho, Bomet, Narok and Migori counties.
He added that designs were underway for the Mau Summit–Eldoret–Malaba road, alongside plans for another section through Kisumu.
In Northern Kenya, Mbadi cited the 740-kilometre Isiolo–Wajir–Mandera road as a major project under construction. He also highlighted a 245-kilometre economic corridor linking Biretwo, Aror and Chesongoch in Elgeyo Marakwet County, funded by the African Development Bank.
On capital markets, the CS said the value of companies listed on the Nairobi Securities Exchange had risen from about Sh1.4 trillion at the end of 2023 to more than Sh4.1 trillion.
He said proceeds from the Kenya Pipeline Company transaction and the partial sale of the government's Safaricom shares had raised more than Sh310 billion for the National Infrastructure Fund, with more than 70,000 Kenyans becoming shareholders.
The fund will support major infrastructure projects, including the expansion and modernisation of Jomo Kenyatta International Airport and the Nairobi–Mombasa Highway, through partnerships with private investors, he said.
Mbadi also reported that pension assets had grown from Sh1.8 trillion at the end of 2023 to Sh3.17 trillion in June 2026, describing domestic savings as an important source of financing for national development.
He urged Kenyans attending the thematic week to learn about tax compliance, government bonds, pension schemes and how to identify fraudulent investment opportunities.
The engagement would also give citizens an opportunity to contribute to discussions on Kenya's long-term development beyond Vision 2030, with views collected during the week expected to inform the national conversation on the country's future, he said.
The Economy (Finance) Thematic Week is part of the activities preceding the 2026 Mashujaa Day celebrations. It seeks to deepen public understanding of the economy, highlight the role of public finance in national development and encourage citizens to participate in shaping Kenya's economic future.
Mbadi was accompanied by Principal Secretaries Chris Kiptoo of the National Treasury and Boniface Makokha of Planning, Central Bank of Kenya Deputy Governor Susan Koech, Head of Presidential Special Projects and Creative Economy Coordination Dennis Itumbi, Kesses MP Julius Rutto and other government officials.
