The Kenya Bankers Association (KBA) has formally asked the government to lower the Pay As You Earn (PAYE) tax rate by five percentage points for every worker in the country.

KBA chief executive Raimond Molenje made the appeal on Thursday, 22 October 2026, during the launch of the 2025 Total Tax Contribution Report, arguing that a universal cut would stimulate consumption, create jobs and help borrowers meet loan obligations.

The association estimates the proposal would return roughly Sh28 billion a year to workers’ pockets and generate about Sh42 billion in immediate economic output through higher consumer spending.

Illustrating the impact, Molenje noted that a employee earning Sh50,000 monthly would see an extra Sh2,244 in take‑home pay each month, equivalent to Sh26,955 annually, assuming other reliefs stay unchanged.

Molenje highlighted that the recent decline in non‑performing loans is encouraging but stressed that sustained loan repayment depends on higher household consumption.

While President William Ruto has announced a PAYE exemption for earners up to Sh32,333 per month, Treasury Cabinet Secretary John Mbadi warned that a uniform cut across all brackets may not be feasible immediately and could be considered in future tax reviews.

The KBA has been advocating broader PAYE relief since December 2025, previously proposing to raise the minimum taxable income to Sh30,000 and lower the top PAYE rate to 30 percent.