Kenyan president announces tax relief measures to ease cost of living

Kenya’s President William Ruto has announced new tax relief measures for low- and middle-income earners to ease the cost of living.

People earning KSh30,000 and below per month (approximately $233) will be exempt from income tax, while those earning up to KSh50,000 (about $388) will see their taxes cut to 25 per cent.

The current threshold for not paying tax covers only salaried workers earning KSh24,000 and below.

Ruto said this means that one and a half million Kenyans will not pay any taxes while another 500,000 will see their tax reduced by 5 per cent.

The proposed tax change aims to boost disposable income, support the middle class, and stimulate economic growth through increased spending and investment.

High-income earners will also see relief, with the top tax rate capped at 30 per cent, down from the current 32.5 to 35 per cent.

The Kenya Bankers Association recently recommended raising the minimum taxable income saying people’s purchasing power has fallen significantly in recent years.

It said when workers take home more pay, they spend, save and invest more, which strengthens the economy, improves loan repayment, and ultimately grows government revenue.

The Tax Laws Amendment Bill will be presented to parliament for approval ahead of the publication of the Finance Bill 2026 due to take place later this year.