NAIROBI, Kenya — Former Deputy President Rigathi Gachagua has called for the suspension of the Affordable Housing Levy and a review of PAYE tax bands as part of measures to increase Kenyan workers’ disposable income and ease the rising cost of living.
Speaking during a media briefing at the Democratic Congress Party (DCP) headquarters on Tuesday, Gachagua said the tax burden was among the major factors driving up household costs.
“Once again, I call on this government to cushion the payslip by suspending the Affordable Housing Levy and reducing the PAYE tax bands,” Gachagua said.
He argued that reducing statutory deductions, alongside a review of the petroleum pricing framework, would leave workers with more money to spend on household needs.
“This, together with the review of the petroleum price framework, will give Kenyans increased net income,” he said.
Gachagua said the current tax regime was placing an excessive burden on workers at a time when the prices of essential goods and services remained high.
“A punitive and unpredictable tax regime is one of the principal causes of the high cost of living,” he said.
The former Deputy President claimed that an average Kenyan worker loses between 45 and 50 per cent of monthly earnings through taxes and other statutory deductions, leaving households with less disposable income.
He used the example of a teacher earning Sh50,000 a month to illustrate what he described as the decline in workers’ purchasing power.
“For example, a teacher in Wajir earning a gross salary of Sh50,000 in 2022 took home approximately Sh42,000. Today, the same teacher takes home Sh38,000 while facing substantially higher food, fuel and transport costs, reduced school capitation and increased challenges in accessing healthcare,” Gachagua said.
Gachagua said the example demonstrated the financial pressure facing workers as statutory deductions and the cost of essential goods increase.
He called for policies that would prioritise higher take-home pay, arguing that workers should retain more of their earnings to meet daily household expenses.
The former Deputy President proposed three key measures: suspending the Affordable Housing Levy, reducing PAYE tax bands and reviewing the petroleum pricing framework.
He said the measures would increase workers’ disposable income while providing relief to households facing rising costs.
Gachagua’s proposals form part of his broader criticism of the Kenya Kwanza administration’s economic record as he seeks to position his political movement ahead of the 2027 General Election.
