Budget 2026/27: No tax relief for workers earning below Ksh.30K despite Ruto, Mbadi promise

Kenyan workers earning below Ksh.30,000 per month will have to wait longer for the tax relief promised by the government after National Treasury Cabinet Secretary John Mbadi failed to announce the much-anticipated exemption from Pay As You Earn (PAYE) tax in the 2026/2027 Budget.

The relief had been expected by more than one million employed Kenyans earning less than Ksh.30,000 monthly.

However, hopes faded after CS Mbadi concluded his three-hour presentation of the 2026/2027 Budget highlights in the National Assembly without including the proposal.

Despite a promise first made by Mbadi in February and reiterated by President William Ruto during several public events, the pledge to exempt workers earning Ksh.30,000 or less from PAYE tax was absent from the budget plans.

“Even if it is not in the Finance Bill, it is not off the table. We want to assure you that the promise made by President Ruto and myself will be implemented. So wait for this,” Mbadi said.

The Treasury CS maintained that the proposal would still be implemented, although he remained non-committal on when exactly it would take effect.

“I have explained that there were some data analyses we were doing, and the President has pronounced himself that it is going to be implemented. We have given a commitment. This government is not going to lie to Kenyans. We have given that commitment. Wait. It is us who said it,” stated Mbadi.

The remarks come barely two weeks after President Ruto acknowledged that there had been bottlenecks in implementing the proposal but insisted the plan remained on course for the new financial year beginning later this month.

“Some people in the Treasury came back to me and said this is going to be big, it is going to cost us Ksh.40 billion in this budget. I told them let us do it," the President said during the National Prayer Breakfast.

"That is why we will be putting a proposal before Parliament to say all low-income earners earning below Ksh.24,000 will not pay anymore, and that category should be moved to those earning below Ksh.30,000. They will not pay any taxes.” 

Concerns had emerged that the government was sending mixed signals and potentially walking back on the promise first made by Mbadi four months ago.

“We have agreed that I take tax amendments to Parliament. In fact, I am not waiting for the Finance Bill to come in June,” Mbadi had stated on February 2, 2026.

The Treasury later shelved the Special Tax Laws Amendment Bill of 2026 and indicated that the proposed tax reliefs would instead be incorporated into the Finance Bill 2026.