The Central Organization of Trade Unions (COTU) has welcomed President William Ruto’s proposal to exempt Kenyan workers earning up to KSh 32,333 per month from Pay As You Earn (PAYE) income tax. The proposal was announced by the President during the Mashujaa Day celebrations in Eldoret on Tuesday, with Ruto indicating that the measure would be presented to Parliament beginning the following week.
The Head of State said the country’s economic progress had created an opportunity for the government to ease the financial burden on some households and enable more Kenyans to benefit from economic gains. According to Ruto, the proposed tax relief is part of broader government efforts to address the high cost of living and improve the financial well-being of citizens.
COTU Calls for Faster Parliamentary Approval
In a statement responding to the announcement, COTU said the proposed PAYE exemption would provide relief to low-income earners who continue to face pressure from taxation and rising living expenses. The workers’ union called on Parliament to expedite discussions on the proposal, arguing that expanding the number of employees exempted from income tax would help protect workers’ earnings. COTU also maintained that more low-income workers should be considered for tax relief to ensure that employees take home a larger share of their monthly salaries.
Ruto Announces Four Measures to Ease Economic Pressure
The proposed PAYE exemption formed part of a package of measures announced by the President to improve affordability, create employment opportunities and support economic participation. One of the proposals involves removing the 25 per cent import duty on mobile phones to make the devices more affordable to Kenyans. Ruto said lowering the cost of mobile phones would allow more citizens to access digital services and benefit from opportunities within the digital economy.
COTU welcomed the proposal, noting that affordable smartphones could help young people acquire digital skills, explore online income opportunities and participate in Kenya’s growing digital economy. The union encouraged young Kenyans to use digital platforms and applications to develop skills, earn income and contribute to the expansion of the country’s platform economy.
Government Plans to Expand Internship Programme
The President also announced plans to expand the national internship programme to accommodate 50,000 young Kenyans beginning January 1. Under the proposal, the interns would receive monthly stipends as they gain workplace experience and improve their employment prospects. The initiative is expected to provide more young people with opportunities to develop practical skills and gain exposure to different professional fields.
Treasury Proposes Stamp Duty Relief on Land Transactions
Another measure announced by Ruto concerns stamp duty on land transactions. The National Treasury has developed proposals to exempt land transactions valued at KSh 1 million or less from stamp duty while introducing progressive rates for transactions involving higher-value properties. The proposed changes are intended to reduce transaction costs for people purchasing lower-value properties while applying a different tax structure to more expensive transactions.
PAYE Exemption Proposal Previously Announced
The latest announcement follows an earlier indication by President Ruto in February that the government was considering tax relief for lower-income employees. At the time, Treasury Cabinet Secretary John Mbadi said he was pursuing a proposal to exempt more than 1.5 million employed Kenyans earning below KSh 30,000 per month from PAYE. Figures cited in the report indicate that Kenya has approximately 3,650,165 salaried workers, with about 1.5 million earning KSh 30,000 or less.
If approved by Parliament and implemented, the new proposal would expand the income threshold for PAYE exemption, potentially benefiting more workers. However, the measure remains subject to the legislative process before it can take effect.
