Treasury to table payslip tax cuts in September
The Kenyan National Treasury plans to introduce a Tax Amendments Bill in September to address public outcry over high payroll deductions. The proposed legislation aims to provide relief to salaried workers following the implementation of the Affordable Housing Levy and the Social Health Insurance Fund.
Why it matters
This policy shift reflects the government's attempt to balance fiscal revenue needs with the economic pressure faced by citizens ahead of the 2027 general election.
The National Treasury will table legislation in September to reduce payroll taxes, bowing to growing public pressure over shrinking pay slips following a series of mandatory deductions, including the 1.5 percent Affordable Housing Levy and contributions to the Social Health Insurance Fund (SHIF).
Treasury Cabinet Secretary John Mbadi said the proposed reforms were left out of the Finance Bill, 2026, because public participation generated wider proposals than the government's initial plan to raise the tax-free income threshold from Sh24,000 to Sh30,000.
Instead, the Treasury will consolidate the proposals into a separate Tax Amendments Bill expected to be introduced in September, less than a year before the August 2027 General Election.
"I know that the concerns have been on pay slips. Next month, I am embarking on public engagement on how to reduce the tax burden on pay slips," Mr Mbadi said on Wednesday.
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