Eldoret:Cabinet Secretary for the National Treasury and Economic Planning, John Mbadi, has revealed a plan to amend legislation in Parliament to exempt employees earning Sh32,800 and below from Pay As You Earn (PAYE) tax. This initiative aims to alleviate the financial burden on low-income households.
According to Kenya News Agency, the proposal is expected to be tabled in Parliament in November as part of the government’s strategy to ensure that economic recovery efforts translate into better living conditions for ordinary Kenyans. Mbadi made this announcement at The Eldoret National Polytechnic during the Mashujaa Day 2026 Economy (Finance) Thematic Week.
The government is also targeting a sustained economic growth rate of approximately five per cent to generate employment opportunities for young people. The economy has already seen a growth rate of 5.1 per cent in both the first and second quarters of 2026, compared to 4.6 per cent in 2025, which Mbadi attributed to the government’s stabilisation efforts amid global challenges such as foreign exchange market pressure and rising international fuel prices.
In addition, the government has maintained a Value Added Tax (VAT) on fuel at eight per cent for an additional 90 days, to mitigate rising fuel prices influenced by conflict in the Middle East. This measure has resulted in Sh54 billion in foregone revenue over six months, with projections of exceeding Sh100 billion over a full year if continued.
Mbadi also highlighted improvements in Kenya’s foreign exchange reserves, which have increased from 2.3 months of import cover in 2022 to 6.1 months, and a reduction in government borrowing costs. He outlined significant road infrastructure projects to boost connectivity and economic growth, particularly in the Western and Rift Valley regions, with several projects either underway or in the planning stages.
Furthermore, the value of companies listed on the Nairobi Securities Exchange has risen significantly, and proceeds from various transactions have contributed over Sh310 billion to the National Infrastructure Fund. This fund will support major infrastructure projects, including the expansion of Jomo Kenyatta International Airport and the Nairobi-Mombasa Highway.
The Economy (Finance) Thematic Week, part of activities leading up to the 2026 Mashujaa Day celebrations, seeks to enhance public understanding of economic operations and the role of public finance in national development. It provides a platform for citizens to engage in discussions about Kenya’s long-term development beyond Vision 2030.
