National Treasury Cabinet Secretary (CS) John Mbadi has confirmed that the government is keen on implementing its promise to revise the Pay as You Earn (PAYE) Tax levied on salaried Kenyans.
Speaking on Tuesday, August 11, Mbadi disclosed that he was still conducting public participation on the policy and would conclude on the matter by September 2026.
He explained that once ready, he would table the Income Tax (Amendment) Bill II 2026 in Parliament.
Mbadi denounced claims that President Ruto had reneged on his promise simply because the tax amendment did not appear in the Finance Bill 2026.
He explained that he had to factor in the new suggestions by Kenyans, including the Kenya Bankers Association (KBA), before tabling the bill in the National Assembly.
"We are trying to manage and see how we can give some relief to Kenyans. You think that promise given by the President will not be acted on? Mbadi is going to implement it on behalf of the government of Kenya and President William Ruto,"
"Remember we had suggested changes in PAYE affecting Kenyans that earn up to Ksh30,000 and Ksh50,000. However, there are other Kenyans like the Bankers Association of Kenya, which has come up with another suggestion. We want to put them together, then we will bring the tax laws amendment Bill, which I will bring," he stated.
The Treasury Boss also responded to questions on whether the government would retain the Value Added Tax (VAT) imposed on fuel beyond October 2026.
He stated that it depended on the situation in the Middle East. However, he stated that the government would have to strike a balance between exposing Kenyans to inflation and losing tax revenue.
" We are balancing inflation vis-à-vis tax revenue. As much as we want tax revenue through VAT, we must understand if it will cause inflation, it will have more harm in the economy," he stated
CS Mbadi added that the government was also considering other sources of funds to subsidise fuel in the country should the need arise.
Earlier, President Ruto had announced plans to exempt Kenyans earning Ksh30,000 and below from PAYE tax. He further suggested that the PAYE rate for those earning between Ksh30,001 and Ksh50,000 should be reduced from 30 percent to 25 percent.
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