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Hello and welcome to the Money Weekly Newsletter, where we are covering the delays in the review of PAYE tax bands.

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CS Mbadi Explains Delays in PAYE Tax Cuts

Salaried Kenyans will have to wait longer for the promised review of PAYE tax bands after Treasury CS John Mbadi omitted the proposal during his presentation of the 2026/27 Budget.

According to Mbadi, the delay is due to ongoing analysis being undertaken by the government.

The Treasury has been conducting simulations of a proposal to make the first Ksh30,000 of a salary tax-free. The government is also seeking to reduce the PAYE rate on the next Ksh20,000 from 30% to 25%.

Despite the delay, Mbadi maintained that the government remains committed to implementing the tax relief. However, he did not indicate when the changes would take effect.

His remarks come weeks after President William Ruto reiterated that the tax relief proposal would be tabled by the government. He also did not provide a timeline on when the proposal would be presented to Parliament.

Nonetheless, the President noted that some Treasury officials had reservations about the plan because it could cost the government Ksh40 billion in revenue.

The proposal to review PAYE was first made by Mbadi in February. The Treasury had initially planned to introduce the changes through a special tax amendment bill before shifting them to the Finance Bill 2026.

However, when the Finance Bill 2026 was published, the proposals were missing.

As a result, banks and other stakeholders are still pushing for the proposals to be introduced as amendments to the Finance Bill.

According to the Kenya Bankers Association, a uniform 5% cut in income tax rates, capped at a maximum rate of 30%, could increase household spending and spur growth in sectors such as manufacturing and agriculture.

Currently, earnings of up to Ksh24,000 per month attract a 10% tax rate; the next Ksh8,333 per month (Ksh100,000 annually) is taxed at 25%, the next Ksh467,000 at 30%, the next Ksh767,000 at 32.5%, and any amount above that at 35%.

Here is a quick recap of the top news stories for the week:

• The government plans to generate revenue by selling anonymised data collected through eCitizen. Under a proposed National Data Governance Policy, businesses, researchers and NGOs would pay to access datasets on areas such as business registrations, land transactions, traffic patterns and crop production. Personal information will not be sold under the new plan. The planned data marketplace is expected to cost Ksh396 million over five years.

• Kenya has awarded China Communications Construction Company (CCCC) a contract worth about Ksh375 billion to expand and modernise JKIA, nearly two years after the cancellation of a proposed deal with India's Adani Group. Financing will come from proceeds channelled through the National Infrastructure Fund, alongside commercial loans backed by air passenger service charges. CCCC's subsidiary has previously delivered projects such as the Nairobi Expressway and Talanta Stadium. 

• The State Department of Housing is seeking changes to the Finance Bill 2026 that would allow KRA to recover more than Ksh100 billion in unremitted Affordable Housing Levy deductions. According to housing officials, some employers have deducted the levy from workers but failed to remit it. The proposed amendments would give KRA powers to audit, assess, investigate and recover unpaid contributions. 

• South Africa's Vodacom could gain significant influence over Safaricom's leadership if its proposed acquisition of the Kenyan government's 15 per cent stake is approved. The Ksh204.3 billion deal would raise Vodacom's shareholding to 55 per cent, giving it the right to nominate candidates for the CEO position. The National Treasury will retain a 20 per cent stake and influence over the board chair appointment.  

Catch Up on More News and Money Tips

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KRA to Recover Unpaid Ksh100 Billion Housing Levy in New Proposal

The State Department of Housing is pushing for changes in the Finance Bill 2026 to give KRA powers to recover unremitted Housing Levy funds.

The government notes that some employers have been deducting the levy from employee salaries and have never remitted it to the government.

It is estimated that Ksh100 billion remains unremitted to the government.

@money254hq

KRA to Recover Unpaid Ksh100 Billion Housing Levy in New Proposal The State Department of Housing is pushing for changes in the Finance Bi... See more

That’s a wrap for this week’s Money Weekly!

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