Treasury Cabinet Secretary John Mbadi has proposed scrapping income tax entirely for salaried workers earning below Sh30,000 a month.
Speaking on Sunday, during the Budget and Privatisation Public Engagement Forum at Kiambu National Polytechnic, Mbadi also said the government is planning to reduce tax rates for those earning up to Sh50,000.
CS Mbadi explained that the move is aimed at easing the cost of living and stimulating consumer spending.
According to CS Mbadi, the proposal to reduce taxes for low income eaners was reached following consultations with President William Ruto.
“We have 3.5 million Kenyans earning a salary. They are carrying the burden on almost everybody. It is not fair. We have decided that I am taking a proposal amendment to Bunge. I am not even waiting for the Finance Bill. Anybody earning below Sh30,000 in this country should pay zero tax. Zero,” Mbadi said.
“And anyone earning below Sh50,000 in this country, we are going to reduce tax. And this is what the government has decided. We have sat down with the President, and we have agreed. We want to give you something in your pocket so that you can spur demand in the economy,” he added.
Further, Mbadi said the Treasury has examined the economy and noticed declining purchasing power, with many households cutting back on everyday spending due to rising prices.
“Because we have looked at the economy, and we can see the economy choking. Because people don’t have money in their pockets to buy from you. Hakuna mtu ananunua mboga. Badala ya kununua mboga ya sasa hivi mtu anakuja kununua mboga four leaves,” CS Mbadi added.
