Meru: Low- and middle-income earners in Kenya are set to receive significant tax relief as the government moves to ease the financial burden on salaried workers.
According to Kenya News Agency, the National Treasury has announced an initiative aimed at increasing disposable income for employees earning below Sh30,000 a month, in an effort to boost consumer spending amid the rising cost of living.
Treasury Cabinet Secretary John Mbadi unveiled the plan at the Budget and Privatisation Public Engagement Forum for the Upper Eastern region, held at Meru National Polytechnic. He stated that the government plans to abolish income tax for workers earning under Sh30,000 and reduce tax rates for those earning up to Sh50,000. Mbadi emphasized that he has agreed with President William Ruto to provide relief to low-income earners, and he is preparing to present a proposal to Parliament on the Tax Law Amendment Bill once it resumes.
For individuals earning between Sh30,000 and Sh50,000, the tax rate will be reduced from the existing 30 percent PAYE to 25 percent. Mbadi also mentioned that the Kenya Revenue Authority (KRA) is working on integrating the tax system to ensure compliance among individuals who have not been paying taxes, particularly property owners. He highlighted the importance of taxing wealth before income, aiming to reduce taxation on income while focusing on wealth.
On the topic of privatisation, Mbadi expressed the government’s commitment to involving the youth in discussions on public financial management and aligning with recent privatisation initiatives. The engagement process has been expanded to include the Business Community and Bunge la Wananchi for comprehensive stakeholder participation and transparency.
Mbadi noted that engagement meetings have already been conducted in Kakamega, Migori, Eldoret, and Nakuru, gathering valuable feedback from the youth on fiscal policies and the goods and services valued by communities. These forums have highlighted the trade-offs associated with allocating limited resources against competing needs, helping citizens understand policy choices within a constrained fiscal environment.
Kenya’s adoption of privatisation as a strategic economic policy aims to improve efficiency by subjecting public services to market forces. This engagement process is timely, considering the increasing discussions on the opportunities privatisation offers for national development through revenue enhancement, public debt containment, and easing pressure on public expenditure.
