Treasury hints at more tax changes after Ruto’s PAYE relief proposal

The proposal by President William Ruto to exempt Kenyans earning Ksh.32,000 and below from taxation is aimed at increasing the disposable income of low-income households, even as the government plans to review other income bands.

The National Treasury has hinted at more changes in the country’s taxation regime, this time targeting different income brackets.

According to Treasury Cabinet Secretary John Mbadi, the review of personal taxes under Pay As You Earn (PAYE) for those earning up to Ksh.32,333 is the first of several measures aimed at improving household incomes.

“If we give this additional relief, it means someone earning Ksh.50,000 will now be much better off than before SHA and the Housing Levy. At Ksh.596, you’ll get more. A person earning Ksh.60,000 will get less still by Ksh.473. If you’re earning Ksh.80,000, you’ll pay Ksh.300 more than before SHA and the Housing Levy,” said Mbadi.

Mbadi also indicated that tax relief for low-income households and exemptions on land transactions worth less than Ksh.1 million could be accompanied by higher taxes on high-value property acquisitions.

“Those who are buying land worth Ksh.1 million, we have said we will not charge you stamp duty. Those who are in rural areas, we might go a step further. We are still looking at the figures, but if you are buying Ksh.50 million worth of land, you pay more. You will pay more. You are not going to pay even four per cent; you will pay a higher percentage. We will work out the figure,” he added.