• For many low‑income earners, these deductions have already eroded disposable income, making it harder to meet daily needs amid rising food, transport, and housing costs.

President William Ruto has announced plans to review Kenya’s income tax structure in a bid to cushion low‑income earners from the rising cost of living.

Speaking at State House, Nairobi, during a meeting with UDA aspirants on February 4, 2026, the President said the government is considering scrapping Pay As You Earn (PAYE) deductions for workers earning below KSh 30,000.

“Any Kenyan earning less than KSh 30,000 will not pay any taxes,” he declared, adding that 1.5 million Kenyans would benefit from the exemption, while another 500,000 would see their tax rate reduced from 30% to 25%.

If implemented, the proposal would significantly increase take‑home pay for thousands of Kenyans in the lower income bracket. It also reflects the government’s broader “bottom‑up” strategy to stimulate grassroots spending and ease financial pressure on working families.

Yet the reality on the ground tells a different story. Salaried employees continue to face multiple statutory deductions, including the Affordable Housing Levy, which remains in force under the Affordable Housing Act.

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The Kenya Revenue Authority (KRA) requires employees to contribute 1.5% of their gross salary, matched by employers, and remit it alongside other statutory taxes.

For many low‑income earners, these deductions have already eroded disposable income, making it harder to meet daily needs amid rising food, transport, and housing costs.

The President’s proposal, therefore, stands as a promise rather than policy. It must pass through Parliament before becoming law. Until then, workers will continue to shoulder PAYE alongside housing and social security levies.

If Parliament approves the changes, Kenya’s tax policy would mark a major shift—prioritizing protection for low‑income earners while maintaining statutory contributions.

For now, the relief remains on paper, and the burden of deductions continues to weigh heavily on ordinary households.

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