The Treasury has set in motion a plan to cut taxes for Kenyans earning less than Sh50,000 per month in an attempt to reduce financial pressure, boost the common Mwananchi’s purchasing power and catalyse economic growth. 

Speaking during the Budget and Privatisation Public Engagement Forum at Kiambu National Polytechnic on Sunday, Treasury Cabinet Secretary John Mbadi said that the government plans to eliminate taxes for individuals earning below Sh30,000 and effect lower rates for those earning up to Sh50,000. 

According to the CS, the move will allow more money to remain in workers’ pockets, easing the strain caused by rising cost of living. 

"We are going to reduce the tax, and the government has decided because we have sat down with the president and he has agreed. We want to give you 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," Mbadi said. 

The CS noted that taxing this segment of taxpayers has been stifling the vibrancy of the country's economy. 

“Anybody earning below Sh30,000 in this country should pay zero tax. And anyone earning below Sh50,000 we are going to reduce tax,” Mbadi said. 

Workers in Kenya shoulder a number of statutory deductions on their monthly pay including Pay As You Earn (PAYE), National Social Security Fund (NSSF) contributions, Social Health Authority (SHA) deductions and housing levy. 

"How can the government continue to demand taxes on people earning Sh30,000 and yet these people are required to pay their rent, transport, and other family expenses? You find that people are left with nothing," Mbadi observed.

The tax measures could provide relief to workers who are facing rising cost of living. In January the prices of basic food items such as cabbages rose by 9.3 percent, fortified maize flour jumped 6.7 percent, while sukuma wiki increased by 4.0 percent compared with December 2025. 

According to official statistics, on a year-on-year basis, the prices of staples such as cabbages and sukuma wiki were up by more than 35 percent and 23 percent respectively, underscoring the heavy burden facing low-income earners.

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