President William Ruto has proposed exempting Kenyans earning Sh32,333 or less per month from paying Pay As You Earn (PAYE) tax, in a move he said would leave more money in the hands of low-income workers.
Speaking during Mashujaa Day celebrations in Eldoret on Tuesday, Ruto said the proposal was among four measures his administration was pursuing to put more money in the pockets of hardworking Kenyans.
“First, we have prepared a proposal to exempt Kenyans earning Sh32,333 per month or less from paying as you earn income tax,” Ruto said.
The President said the proposed exemption would provide relief to workers on modest incomes, allowing them to retain more of their earnings for household expenses.
“For workers on modest incomes, every shilling saved means more money for food, transport, school expenses, and the needs of their families,” he said.
PAYE is a tax deducted from employees’ salaries by employers and remitted to the Kenya Revenue Authority.
Under the proposal, workers earning Sh32,333 or less would no longer have PAYE deducted from their monthly income if the necessary changes are approved and implemented.
Ruto said the government had prepared the proposal as part of wider measures aimed at increasing disposable income among Kenyans.
The announcement came alongside other proposals targeting the cost of property ownership and access to the digital economy.
The National Treasury, Ruto said, had developed proposals to exempt land transactions valued at Sh1 million or less from stamp duty and introduce progressive rates for higher-value transactions.
The government also plans to pursue legal and regional customs processes to remove the 25 per cent import duty on mobile phones.
Ruto said reducing the cost of mobile phones would make digital opportunities more accessible, particularly to young Kenyans.
However, the PAYE proposal directly targets workers earning modest incomes by seeking to reduce the amount of tax deducted from their salaries each month.
The President said the measures were informed by the need to respond to demands from Kenyans for greater economic relief.
“Whether we are prepared to do more where our people continue to demand. That is why on this Mashujaa Day, I wish to announce four further measures to put more money in the pockets of hardworking Kenyans,” he said.
The proposal will require the relevant policy and legal processes before it can take effect.
If implemented, the exemption would mean eligible workers would retain the portion of their salary that would otherwise have gone towards PAYE, potentially increasing their monthly take-home pay.
