Kenya’s President William Ruto has announced a series of tax relief measures aimed at cushioning low- and middle-income earners from the rising cost of living.
Under the proposed changes, individuals earning up to KSh30,000 per month (around $233) will be exempt from income tax. Those with monthly earnings of up to KSh50,000 (about $388) will see their tax rate reduced to 25 percent. Currently, only workers earning KSh24,000 and below are exempt from taxation.
President Ruto said the reforms will benefit nearly two million Kenyans—1.5 million who will pay no tax at all, and another 500,000 who will enjoy a 5 percent reduction. The initiative is designed to increase disposable income, strengthen the middle class, and stimulate economic growth through higher spending and investment.
High-income earners are also set to benefit, with the top tax rate capped at 30 percent, down from the current range of 32.5 to 35 percent.
The Kenya Bankers Association has previously urged the government to raise the minimum taxable income, citing declining purchasing power. The association argued that when workers retain more of their earnings, they spend, save, and invest more—boosting economic activity, improving loan repayment, and ultimately increasing government revenue.
The Tax Laws Amendment Bill will be tabled in parliament for approval ahead of the Finance Bill 2026, expected later this year.
