The government has delayed the review of PAYE tax bands after earlier committing to introduce legislation by the end of September 2026.
Addressing the media on September 16, 2026, National Treasury CS John Mbadi said the review would come after the IMF and World Bank Annual Meetings scheduled for October 12–18, 2026.
Mbadi had previously indicated that Treasury would table a Bill in Parliament by the end of September to trigger the review of the PAYE bands.
Public Participation to Come First
Speaking about the new timeline, Mbadi said Treasury would first conduct public participation before submitting the proposed changes to Parliament.
“It is coming. I will do the public participation first. Kenya has become what it is because of the Constitution that we have. If I bring them without public participation, someone might go to court to stop it. Sometimes it can be very uncomfortable,” Mbadi stated.
He attributed the delay to a busy September schedule and said the public participation would now take place in the first week of October.
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“This month is a bit crowded. I will do it immediately in the first week of October,” he stated.
Mbadi also said the process would be linked to his attendance at the IMF and World Bank Annual Meetings.
“I will break it when I am going for the spring meeting, then come back and conclude it, then we process the Bill through the National Assembly,” Mbadi said.
Proposed PAYE Relief
Between February and March 2026, President William Ruto and Treasury CS John Mbadi announced plans to exempt monthly earnings of up to KSh30,000 from PAYE and reduce the rate on the next KSh20,000.
Treasury said it would introduce the changes through tax legislation, including a Tax Laws Amendment Bill or the 2026 Finance Bill.
However, when the Finance Bill 2026 was tabled and debated between April and June, it did not include the promised PAYE relief.
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The omission drew criticism from some MPs, unions and members of the public, while Parliament’s Finance Committee also considered alternative proposals for restructuring PAYE rates.
From July to September, Mbadi maintained that the government would implement the relief through a separate PAYE Bill.
He had previously committed to having the proposed legislation tabled in Parliament by the end of September 2026, following public participation.
The latest timeline now pushes the public participation process to October, further delaying the proposed PAYE changes.
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