Treasury Cabinet Secretary John Mbadi said the government intends to eliminate the Ksh28,800 per‑year personal relief currently granted to employees under the PAYE system.

Instead of the relief, the proposal would exempt workers earning Ksh32,333 a month or less from PAYE by adjusting the tax bands, effectively removing tax liability for that income bracket.

Mbadi indicated the Treasury will table the amendment to Parliament in the coming week, alongside a move to drop stamp duty on land deals under Ksh1 million.

Under the current Income Tax Act, employees receive a monthly personal relief of Ksh2,400 (Ksh28,800 annually), which employers deduct from the calculated PAYE before remitting the balance to the Kenya Revenue Authority.

The relief is especially significant for low‑income earners; for example, an employee with a monthly tax liability of Ksh5,000 would pay only Ksh2,600 after the Ksh2,400 relief is applied.

If the relief is removed while other tax bands remain unchanged, many workers could see higher net PAYE deductions, as the Ksh2,400 reduction would no longer apply.

President William Ruto recently directed the Treasury to submit the exemption proposal, noting that raising the threshold from Ksh30,000 to Ksh32,333 per month would help modest‑income earners afford essentials such as food, transport and school fees.