Ruto announces tax cuts for Kenyans earning up to Ksh50,000
By Kenneth Mwenda, February 4, 2026President William Ruto has announced plans to reduce Pay As You Earn (PAYE) taxes for Kenyans earning up to Ksh50,000, in a move aimed at easing the financial burden on low and middle-income workers.
Speaking to UDA aspirants at State House, Nairobi, on Wednesday, February 4, 2026, Ruto outlined the proposed tax reforms, saying the government would forward the recommendations to Parliament for consideration.
“We would not be able to reduce taxes if we had not set the foundation right. And that is why we are going to Parliament. We are now saying that any Kenyan who earns less than 30,000 shillings will not pay any taxes,” the president said.
“Number two, we are saying any Kenyan who earns up to 50,000, we are reducing their taxes from 30 per cent to 25 per cent. 1.5 million working Kenyans will not pay any taxes. 500,000, another 500,000 working Kenyans will have their taxes reduced from 30 per cent to 25 per cent,” he added.
“That is how progressively we are going to make sure that we manage the cost of living so that the people at the bottom of the pyramid, we can be able to support them.”
Mbadi backs tax relief
Treasury Cabinet Secretary John Mbadi earlier supported the reforms, noting that they are designed to put more money in the pockets of low- and middle-income earners while stimulating the economy. Speaking at a public engagement forum in Kiambu on February 1, 2026, Mbadi said the government had okayed the tax relief measures.
“Those salaried Kenyans, we have 3.5 million Kenyans earning salary. They are carrying the burden on almost everybody. It is not fair. We have decided I am taking proposal amendment to Bunge. I am not even waiting for Finance Bill. Anybody earning below 30,000 in this country should pay zero tax. Zero,” Mbadi said.
Currently, a worker earning Ksh50,000 pays 30 per cent in PAYE, amounting to Ksh15,000. With the proposed 25 per cent rate, the same worker would pay Ksh12,500, leaving Ksh37,500 before other deductions such as NSSF and NHIF. This would put an additional Ksh2,500 in the worker’s pocket every month, or Ksh30,000 annually.
For those earning below Ksh30,000, the relief would be even greater, as they would no longer pay PAYE at all. Treasury estimates indicate that about 1.5 million workers would benefit from this exemption, while the broader PAYE reduction would affect over three million salaried Kenyans.
Mbadi emphasised that the reforms aim to shield Kenyans from excessive economic strain.
“And anyone earning below 50,000 in this country, we are going to reduce tax. We want to give you something in your pocket so that you can spur demand in the economy,” he said.
Ruto said the tax cuts reflect the positive fiscal outcomes his administration has achieved since taking office in 2022. He noted that the measures will make taxation more equitable, particularly for low-income earners struggling with the cost of living.