1. The Sh30,000 “Zero-Tax” Milestone
The headline of the President’s announcement is the significant hike in the tax-free threshold.
The Change: The minimum taxable income is moving from Sh24,000 to Sh30,000.
The Impact: Approximately 1.5 million working Kenyans will now be entirely exempt from Pay As You Earn (PAYE). This provides immediate relief to those in the lower-income bracket who have been hardest hit by food and transport inflation.
2. Middle-Class Breathing Room
Middle-income earners aren’t being left behind. The President announced a strategic reduction in tax rates for those earning just above the new threshold.
The Slash: For those earning up to Sh50,000, the PAYE rate will be reduced from 30% to 25%.
Disposable Income: This move is expected to benefit an additional 500,000 workers, putting thousands of shillings back into their monthly budgets for rent, school fees, and savings.
3. “It Was Not a Slogan”
In a defiant address, President Ruto linked the new measures directly to his Bottom-Up Economic Transformation Agenda (BETA).
“1.5 million working Kenyans will not pay any taxes. Another 500,000 will see their taxes reduced… That is how progressively we are going to manage the cost of living. It was not a slogan,” the President stated.
