Ruto Overrules Treasury: No More PAYE for Workers Earning Under Sh30,000

President William Ruto has endorsed the proposed PAYE tax relief for low-income earners.

Speaking on Thursday during the National Prayer Breakfast at Safari Park in Nairobi County, Ruto said the country can fund development through new and innovative approaches without putting extra pressure on the national budget.

“Today we are doing many things. I even sent a proposal to the Treasury to consider how we can slow down the tax burden, especially for low-income earners, and remove some taxes from them,” he said.

Ruto acknowledged that the Treasury raised initial concerns about the proposal’s impact on public finances, warning it could strain the budget. However, he said the government should still move forward with the plan despite the estimated cost.

“The Treasury came back and said, ‘Oh, Mr. President, you know this is going to be very big. You know it’s going to cost us Sh40 billion in this budget.’ I told them, “Let’s do it. Let’s do it,” he said.

He confirmed that the relief will cover workers earning up to Sh30,000.

“We are talking about low-income earners, people earning up to Sh24,000, who currently pay PAYE at 10%. We want them to stop paying. That group should also include workers earning up to Sh30,000 or less, who will pay no taxes,” he added.

His comments came after Treasury CS John Mbadi said the PAYE relief for low-income workers did not feature in the proposed Finance Bill 2026. Mbadi said the plan remains under review due to concerns about revenue and budget balancing.

Speaking to the media, Mbadi said, “We are running simulations, and we have some reports. We needed to check how different factors are happening at the same time, and we are also assessing the overall effect on the economy.”

RELATED – Mbadi Explains Why Govt Cannot Yet Scrap PAYE for Low Earners

Mbadi also explained that the government wanted to widen the personal income tax base to help offset the PAYE revenue loss.

The proposals also suggested increasing the tax-free threshold to Sh30,000 and lowering the 30% bracket to 25% for middle-income earners. Based on the projections, workers would see net pay gains of between Sh731 and more than Sh2,000, depending on their income levels.

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