PAYE Scrapped for Low Earners

PAYE scrapped for low earners, more money in pockets

In a significant move aimed at easing the financial burden on low-income earners, President William Ruto has announced plans to scrap the PAYE tax for workers earning a monthly salary of Sh30,000 and below. The announcement has been welcomed by many Kenyans who have been grappling with the rising cost of living.

Treasury Secretary Mbadi says PAYE will be removed for employees earning Sh30,000 and below, pending parliamentary approval. A salary of Sh30,000 is barely enough to survive, not to mention paying taxes,” Mbadi said.

The move is expected to benefit approximately 1.5 million Kenyans who are currently on the PAYE tax bracket. Additionally, those earning between Sh30,000 and Sh50,000 will see a reduction in their tax rate from 30% to 25%. Mbadi emphasized that the goal is to boost consumption and stimulate economic growth by putting more money in the pockets of low- and middle-income earners.

“This is a significant relief to our people, and we are committed to ensuring that it is implemented as soon as possible,” Mbadi said. The proposal is expected to benefit around 3.5 million Kenyans, and the government is working to fast-track it through Parliament.

In a statement, President Ruto said, “We are committed to supporting our people and ensuring that they have enough money to meet their basic needs. This move is part of our broader efforts to address the economic challenges facing our country.”

The announcement has been welcomed by labor unions and civil society organizations, who have long been advocating for tax relief for low-income earners. “This is a welcome move, and we hope it will bring some relief to our members who have been struggling to make ends meet,” said Joseph Muchiri, Secretary General of the Central Organization of Trade Unions (COTU).

As Kenyans await the policy, many wonder what other financial support the government will provide.

What do you think about this move? Will it be enough to make a difference in the lives of low-income earners?

The government is expected to announce more details about the implementation of this policy in the coming days.