Kenyan President William Ruto has unveiled new income tax relief measures aimed at reducing the cost of living for low- and middle-income earners.
Under the proposed changes, workers earning KSh30,000 or less per month (about $233) will be fully exempt from income tax. Those earning up to KSh50,000 (around $388) will have their tax rate reduced to 25 per cent.
Currently, only salaried employees earning KSh24,000 and below are exempt from income tax.
Ruto said the measures would see about 1.5 million Kenyans removed from the tax net altogether, while a further 500,000 workers would benefit from a five-percentage-point tax cut.
The president said the changes are intended to increase disposable income, strengthen the middle class and stimulate economic growth through higher consumer spending and investment.
High-income earners are also set to benefit, with the top tax rate capped at 30 per cent, down from the current range of 32.5 to 35 per cent.
The Kenya Bankers Association has welcomed the move, having recently called for an increase in the minimum taxable income, arguing that workers’ purchasing power has declined sharply in recent years. The association said higher take-home pay encourages spending, saving and investment, which in turn supports economic growth, improves loan repayments and ultimately boosts government revenue.
The proposed measures will be included in the Tax Laws Amendment Bill, which is to be presented to parliament ahead of the Finance Bill 2026 later this year.
