Treasury Cabinet Secretary John Mbadi has announced that the government is considering key adjustments to Pay As You Earn (PAYE) and other tax measures to prevent overtaxation of Kenyan pay slips.
Speaking during a session before the Senate on Tuesday, Mbadi disclosed that the government was to make the adjustments in the current Finance Bill that is before the Parliament; however, that was not possible due to several limiting factors.
The Cabinet Secretary stated that while the government had planned to revise the Pay As You Earn (PAYE) tax, it couldn’t do so initially because the Kenya Revenue Authority (KRA) did not meet its revenue collection goals.
However, changes to PAYE are now expected to be included in the upcoming Finance Bill. These changes aim to increase the amount of disposable income—money left after taxes—for Kenyan individuals and households.
“We have not made major adjustments to taxes, which will disadvantage the taxpayers in terms of reducing their disposable income. We made promises to address this, however, that was not possible. However, where we have reached, we cannot reduce disposable income,” Mbadi noted.
Further, the CS announced that the government will reduce the corporate tax from 30 to 28 per cent in the next Finance Bill.
