Nairobi — President William Ruto has announced new tax relief measures for Kenyan workers, exempting those earning up to Sh30,000 from income tax.
Workers earning up to Sh50,000 will also benefit from a reduction in PAYE to 25 per cent from 35 per cent.
The President said the move is aimed at easing the cost of living and boosting disposable income among low and middle-income earners.
"1.5 million working Kenyans will not pay any taxes. Another 500,000 working Kenyans will have their taxes reduced from 30% to 25%. That is how progressively we are going to make sure that we manage the cost of living bottom up. It was not a slogan," Ruto stated.
National Treasury Cabinet Secretary John Mbadi on Monday told public participation forum on budget processes in Meru town, that a tax laws amendment bill is ready for presentation to parliament.
Mbadi cited rental income earners, who should be paying up to Sh100 billion in taxes, but only Sh17 billion is realized.
"Once we have done this, we will be going after those who are making big money in business but not paying taxes. KRA will intensify monitoring of all Kenyans to ensure those making money are paying tax," he said.
The proposal by the Treasury comes days after banks and Saccos appealed for raising the tax-free salary band to Sh40,000, citing inflation.
Earlier, the World Bank had proposed that Kenya increase the top rate of income tax to 38 percent and reduce the tax rate for those earning between Sh32,000 and Sh166,000 to 25 percent.
