Mbadi: Bill effecting Ruto's PAYE order will be tabled next week

A proposed law to give effect to President William Ruto's directive on Pay As You Earn (PAYE) changes is expected in the National Assembly next week, according to National Treasury Cabinet Secretary John Mbadi and National Assembly Finance and Planning Committee chairman Kuria Kimani.

President Ruto announced the tax changes during Mashujaa Day celebrations earlier this week. 

The proposed law will scrap personal relief and raise the tax exemption ceiling to Sh32,333. 

Personal relief, which is meant to lighten the tax burden on taxpayers, is currently set at Sh2,400 or Sh28,800 per year. Scrapping it was part of the Medium-Term Revenue Strategy for the 2024/25 to 2026/27 financial years, which proposed rationalising tax reliefs.

Fourth tax amendment cycle in a year

The Bill will mark the fourth round of tax law changes in 2026. Changes to capital gains tax came at the start of the year, followed by the Finance Act 2026 in mid-year. A fortnight ago, the Tax Laws (Amendment) Act 2026 introduced changes on value-added tax on petroleum products and on excise duty.

The latest amendment also comes against a compressed budget calendar for the 2027/28 financial year because of the August 2027 General Election. Under that calendar, the Finance Bill 2026 is expected by the end of January 2027.

The tight timelines raise the risk of legislative fatigue, with stakeholders expected to be engaged on next week's Bill as well as on the Finance Bill 2027.

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