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Kikuyu Member of Parliament and National Assembly Majority Leader Kimani Ichung’wah has told salaried workers that the government still plans to revise the Pay As You Earn tax structure. He said the absence of the proposal in the 2026 Finance Bill does not cancel the plan.
He addressed MPs and the public shortly after Parliament passed the Finance Bill on Thursday night. He insisted that work on the tax adjustment continues within the Treasury and parliamentary leadership.
Ichung’wah explained that the Finance Bill reached Parliament in April 2026. He said the President introduced the PAYE reform idea later during the National Prayer Breakfast in May.
He stated that the gap in timing prevented inclusion of the proposal in the bill. According to him, Parliament cannot easily insert major tax policy changes after formal submission.
He maintained that the process is still active and will be handled separately through additional proposals.
Leadership Promises Follow Through
The Kikuyu MP said the government cannot ignore a directive made by the Head of State. He told workers that the Executive and Parliament leadership are coordinating on implementation.
He added that Treasury officials are working on technical details required to adjust tax bands. He also said the Finance Committee is involved in reviewing the structure before formal changes are introduced.
He stated that the government remains committed to easing pressure on low-income earners.
President William Ruto had earlier instructed the National Treasury to design reforms that reduce PAYE deductions for workers earning lower incomes. The proposal seeks to exempt workers earning up to Ksh30,000 per month.
The current exemption threshold stands at Ksh24,000. The new plan would raise it, allowing more workers to retain a larger share of their salaries.
Ruto said the goal focuses on increasing disposable income for households facing high living costs.
Clarification on Rental Tax and VAT Measures
Ichung’wah also responded to claims that the Finance Bill increased rental income tax rates. He said Parliament did not approve any rise from 7.5 per cent to 10 per cent.
He explained that the law only clarified or adjusted administrative aspects of tax collection, not the rate itself.
He further confirmed that MPs approved removal of 16 per cent VAT on imported second-hand clothes. The decision reduces costs for Mitumba traders and supports the second-hand clothing sector.
Broader Debate on Tax Direction
The Finance Bill has attracted public debate over tax burden and government revenue needs. Critics argue that some measures still strain households and small businesses.
Government officials maintain that the reforms aim to balance revenue collection with economic relief. They say upcoming PAYE proposals will determine how quickly workers benefit from tax adjustments.
Attention now shifts to when the Treasury will formally present the PAYE amendment proposals to Parliament for debate and approval.
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