NAIROBI, Kenya — National Assembly Majority Leader Kimani Ichung’wah has assured salaried Kenyans that the government’s plan to ease the Pay As You Earn (PAYE) tax burden on low-income workers remains on course, despite the proposal not appearing in the Finance Bill 2026 passed by Parliament.
Speaking shortly after lawmakers approved the Finance Bill, Ichung’wah said the National Treasury, Parliament’s Finance Committee, and House leadership were working on mechanisms to implement President William Ruto’s pledge to review PAYE and increase workers’ disposable income.
He explained that the proposal was absent from the Finance Bill because the legislation had already been prepared and submitted to Parliament before the President announced the planned tax changes.
“I want to remind you that the Finance Bill came to the House in April this year, and the President announced himself on the matter on May 27 during the National Prayer Breakfast,” Ichung’wah said.
“I can assure you that the Treasury, the Finance Committee, and those of us in the House leadership are working on that. I can assure you that the President cannot make a pronouncement in vain,” he added.
The clarification follows growing concern among employees and labour groups over the omission of PAYE relief measures from the Finance Bill, despite earlier commitments by the government to reduce the tax burden on low-income earners.
In May, President Ruto announced that he had directed the National Treasury to develop proposals exempting workers earning up to Sh30,000 per month from PAYE. The proposal would raise the tax-free threshold from the current Sh24,000 monthly income level.
“I told the Treasury that it is time to look at how we can slow down, especially for the low-income earners, and remove some taxes from them,” Ruto said at the time.
The proposed adjustment would benefit thousands of workers in the lower income bracket and is part of broader government efforts to address concerns about the cost of living and declining household purchasing power.
Meanwhile, Ichung’wah defended other provisions contained in the Finance Bill 2026, dismissing reports that Parliament had increased rental income tax from 7.5 pc to 10 pc.
He also highlighted amendments approved by lawmakers to remove the proposed 16 pc Value Added Tax (VAT) on imported second-hand clothing, a move expected to provide relief to traders in the mitumba sector and help contain consumer prices.
The Finance Bill has undergone significant changes following public submissions and scrutiny by the National Assembly Finance Committee. Among the notable amendments adopted by MPs are the removal of the proposed 25 pc excise duty on mobile phones, retention of VAT incentives for electric vehicles and renewable energy products, and the rejection of provisions that would have expanded the Kenya Revenue Authority’s enforcement powers during ongoing tax disputes.
