Treasury Cabinet Secretary John Mbadi has announced that the government plans to offer tax relief to Kenyans earning less than KSh30,000 per month, in a move aimed at boosting household incomes and stimulating economic activity.
Speaking at Kiambu National Polytechnic on Sunday, February 1, Mbadi said the proposal has already received approval from President William Ruto following consultations.
“We are going to reduce the tax, and the government has decided because we have sat down with the President and he has agreed,” Mbadi said.
“We want to put something in your pocket so that we can spur demand in the economy, because it is struggling. People don’t have money in their pockets.”
The Treasury CS noted that taxing low-income earners has significantly constrained economic vibrancy at the grassroots level, which he described as the backbone of Kenya’s economy.
Employed Kenyans currently face multiple statutory deductions, including Pay As You Earn (PAYE), National Social Security Fund (NSSF) contributions, National Hospital Insurance Fund (NHIF)/Social Health Authority (SHA) deductions, and the housing levy.
According to Mbadi, the cumulative effect of these deductions has often left low-income earners struggling to meet basic needs such as food, rent and school fees, limiting their purchasing power and slowing overall economic growth.
The proposed tax relief, once implemented, is expected to ease financial pressure on workers in the lower income bracket and help stimulate consumer spending across the economy.
