President William Ruto outlined proposed income tax relief at the KECSHA meeting in Mombasa.
President William Ruto says proposed income tax relief would outweigh housing levy deductions for a teacher earning Ksh50,000 a month.
President William Ruto says proposed PAYE tax cuts could leave a teacher earning Ksh50,000 with Ksh1,250 more each month. His calculation offsets projected tax savings against the Affordable Housing Levy deduction.
Speaking at the Kenya Comprehensive School Heads Association meeting in Mombasa, Ruto defended the levy while outlining planned income tax relief. He said the government proposes raising the monthly PAYE exemption threshold from Ksh24,000 to Ksh32,000.
The president argued that workers would retain more income despite continuing to contribute towards the housing programme.
How the proposed PAYE tax cuts would work
Under the threshold Ruto outlined, employees would pay no PAYE on their first Ksh32,000 in monthly taxable income. That would increase the exempt amount by Ksh8,000 compared with the current threshold.
For workers in the 25 per cent tax bracket, he calculated monthly savings of Ksh2,000. Meanwhile, a teacher earning Ksh50,000 would contribute Ksh750 through the 1.5 per cent housing levy.
Ruto therefore put the difference between those projected savings and the levy deduction at Ksh1,250. He presented that amount as a gain for the teacher while defending the continued housing contribution.
The wider tax relief proposal sets the monthly tax-free threshold at Ksh32,333, alongside abolishing the existing Ksh2,400 personal relief. However, the plan would retain the housing levy at 1.5 per cent of gross salaries.
Ruto defends housing programme spending
Ruto also challenged political rivals over their calls to protect workers’ payslips. He argued that the proposed income tax changes offered relief without ending contributions to the Affordable Housing Programme.
In defending the programme, the president said it had supported jobs and construction across several sectors. These include homes, markets and student accommodation, with approximately 1.1 million people working under the initiative, he said.
He also put the value of contracts for houses, markets and student hostels at Ksh1.2 trillion. In addition, Ruto said accommodation projects underway across the country would provide capacity for more than 180,000 learners.
