The Kenya Bankers Association (KBA) has submitted a proposal for a five‑percentage‑point reduction in Pay As You Earn (PAYE) tax that would apply across every income bracket, differing from President William Ruto’s latest suggestion to exempt only those earning Ksh32,333 or less per month.

KBA chief executive Raimond Molenje argued that a universal cut would not only increase disposable income but also help rebuild public confidence in the government, saying the measure should benefit all workers rather than target low‑income earners.

For a salaried employee earning Ksh50,000 a month, the proposed 5% cut could add roughly Ksh2,244 to monthly take‑home pay, amounting to about Ksh26,955 annually, assuming the reduction applies to the entire taxable portion of earnings.

KBA estimates that the universal reduction would return approximately Ksh28 billion to workers each year and could generate close to Ksh42 billion in immediate economic output through higher consumer spending.

President Ruto’s exemption plan has evolved from an earlier Ksh30,000 threshold to the current Ksh32,333 limit, a change announced during the Mashujaa Day celebrations in Eldoret.

Under existing tax rules, resident employees receive a personal relief of Ksh2,400 per month, offsetting PAYE on the first Ksh24,000 of taxable income, with higher earnings taxed at progressive rates.

Treasury Cabinet Secretary John Mbadi indicated that the government intends to table an amendment to Parliament in November to formalise the low‑earner exemption, though the proposal must still pass the legislative process before taking effect.

KBA’s broader tax‑review campaign dates back to December 2025, when the banking sector advocated raising the minimum taxable income to Ksh30,000 and lowering the top PAYE rate to 30%, arguing that workers need to retain more earnings to support households and businesses.

Kenyan workers now await clarification on whether the government will adopt the bankers’ all‑income‑brackets cut or proceed with the President’s targeted exemption for earners below Ksh32,333 per month.