Kenya Delays Income Tax Relief for Low-Income Workers Citing Revenue Shortfall

The government has delayed plans to introduce income tax relief for workers earning up to Sh30,000, citing fears of a Sh35 billion revenue shortfall. Officials said the Treasury is still reviewing the impact of the proposal before including it in the Finance Bill.

The proposal had sought to exempt workers earning up to Sh30,000 from PAYE tax. It also aimed to lower the tax rate for those earning between Sh30,000 and Sh50,000 to 25 percent from the current 30 percent. The review will assess whether increased tax collection and spending cuts can offset the projected revenue losses.

Pressure has grown to ease the burden on workers facing a high cost of living. The announcement came after the measure was initially put forward earlier this year.

Background on the Proposal The tax relief plan was announced earlier by the president. It targeted lower-income earners amid ongoing concerns about living costs in Kenya. Implementation had been expected as part of forthcoming budget measures but will now be deferred pending further analysis.

Officials have not set a new timeline for a decision. The Finance Bill is the annual legislation that outlines tax and revenue measures for the fiscal year. Any changes would need to be incorporated before its finalization and passage.