Low and middle-income earners in Kenya are set to receive major tax relief as the government moves to ease the financial burden on salaried workers. The changes are aimed at giving employees more disposable income amid rising living costs.
Treasury Cabinet Secretary John Mbadi announced the plan on Monday at the Budget and Privatisation Public Engagement Forum for the Upper Eastern region, held at Meru National Polytechnic.
The programme will abolish income tax for workers earning less than Sh30,000 a month, while those earning between Sh30,000 and Sh50,000 will see their tax rate reduced to 25 per cent from the current 30 per cent PAYE.
“We have agreed with President William Ruto that low-income earners should be given a reprieve and to this effect, I am preparing to take a proposal to Parliament on the Tax Law Amendment Bill once it resumes,” Mbadi said.
He also outlined plans to strengthen tax compliance, particularly among individuals not registered on the payroll. “We have many people making Sh100,000 but just because they are not in the payroll you want to run away yet you are also using the roads and other infrastructures like that salaried person who is being taxed. This is being unfair and we are coming for you softly through your records,” he said.
Mbadi emphasised that the government intends to focus on taxing wealth rather than trade.
“The principles of taxation dictate that you should tax wealth and if this is not enough you go to the income tax but not trade. We are trying to avoid taxing trade and reducing taxation on income but tax wealth and this is what most countries do,” he added.
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