COTU presses Parliament to speed up Ruto’s PAYE tax relief plan

The Central Organisation of Trade Unions (COTU) has pressed Parliament to speed up approval of President William Ruto’s plan to exempt workers earning up to Sh32,333 monthly from PAYE, arguing that the change would help low-paid employees retain more of their earnings amid the high cost of living.

COTU Secretary-General Francis Atwoli welcomed the proposed tax break, saying it would offer relief to workers who have continued to shoulder a heavy tax burden. He said the move would be particularly helpful to employees in the private sector, where many unionisable workers earn salaries within the proposed exemption range.

Atwoli called for the plan to be implemented without unnecessary delays, urging the government to ensure that more low-income earners benefit from the proposed changes.

“Exempting this category of wage earners from PAYE is a huge step by the President to cushion these low-income earners from heavy taxation. This will go a long way in reducing the burden these workers have continued to carry in their working lives, putting more cash in their pockets,” he said.

Ruto unveiled the proposal during the Mashujaa Day celebrations at Kipchoge Keino Stadium in Eldoret on Tuesday, October 20, 2026, announcing that the plan would be taken to Parliament from the following week.

“The stability we have achieved in our economy now affords us an opportunity to ease the burden on sections of our population and ensure that more Kenyans share in the benefits of our progress,” Ruto said.

The planned PAYE exemption forms part of a four-point package the President announced to help Kenyans cope with rising living expenses and improve access to economic opportunities.

COTU has also supported the proposed removal of the 25 per cent import duty on mobile phones, saying lower prices would make it easier for young people to access digital services and explore ways of earning an income online.

“Making phones more affordable will bring the opportunities of the digital economy within reach of more citizens,” Ruto noted.

Atwoli encouraged unemployed young people to take advantage of digital platforms and applications to seek work and generate income, arguing that access to affordable phones could help them participate in the online economy.

“Enter the digital space and explore the opportunities provided by various applications to earn a living and grow the Kenyan platform economy for their betterment,” COTU added.

The union also pointed to the International Labour Organisation (ILO), which it said had recognised the platform economy as an avenue for job creation, income generation and business development. It further noted that digital work could help support efforts to formalise employment.

“No doubt that it is against this background that the ILO, observing that the platform economy has created opportunities for young people and business development,” Atwoli said.

Other proposals announced by Ruto include an expansion of the national internship programme to accommodate 50,000 young Kenyans from January 1. Those admitted to the programme are expected to receive a monthly stipend.

The President also revealed that the National Treasury had prepared plans to exempt land transactions valued at Sh1 million or below from stamp duty. Transactions involving more expensive properties would be subject to progressive rates under the proposed changes.

The latest tax relief plan follows an earlier proposal raised in February, when Treasury Cabinet Secretary John Mbadi announced efforts to exempt more than 1.5 million employed Kenyans earning less than Sh30,000 a month from PAYE.

Ruto had also signalled his intention to ease the income tax burden on salaried workers during that period.

Data from the National Exchequer puts the number of salaried workers in Kenya at about 3,650,165, with approximately 1.5 million earning Sh30,000 or less per month.

The new proposal would increase the monthly earnings limit for PAYE exemption to Sh32,333. The change, however, remains subject to parliamentary debate and approval.