Mbadi Speaks on PAYE Rates and Time for Filing KRA Returns

National Treasury Cabinet Secretary (CS) John Mbadi has said the government is still considering changes to Pay As You Earn (PAYE) rates under the Finance Bill 2026.

Speaking during a media briefing held on Monday, May 11, 2026, Mbadi said the proposal to increase the tax-free monthly income threshold from Ksh 24,000 to Ksh 30,000 has not been dropped.

“We have not dropped that issue, the PAYE, which is pay as you earn,” Mbadi said.

He explained that the Treasury team is currently carrying out simulations to understand how the proposed changes would affect government revenue.

Mbadi said early simulations showed that the government could lose about Ksh 35 billion in revenue every year if the new PAYE proposal is implemented.

“The first simulation was that we were going to lose income revenue of about 35 billion Kenyan shillings per year,” he said.

Mbadi added that the Treasury is also reviewing the country’s economic situation and the impact of previous personal income tax reforms introduced through the Kenya Revenue Authority (KRA).

He revealed that the matter has already been discussed with President William Ruto.

“As a matter of fact, we have agreed with the Head of State that this is a matter that we are considering,” Mbadi stated.

Possible Changes Before the Finance Bill is Passed

The CS said Kenyans should wait for the final decision before the Finance Bill 2026 is passed.

He also dismissed reports claiming he had changed his position on the issue.

“Before June 30, before the bill is passed, the government is likely to propose amendments. I could see some media reporting that I have backtracked. I have not backtracked,” he clarified.

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Mbadi Explains Proposed Changes to Filing KRA Returns

Mbadi also defended the proposal to change the timeline for filing tax returns with the Kenya Revenue Authority.

He explained that taxpayers normally file returns for income earned in the previous calendar year and therefore have enough time to submit their returns earlier.

“Once you come to the end of December, you have January, February, March, and April. Why can’t you file returns between January and April?” he asked.

According to Mbadi, many Kenyans wait until the last minute to file returns, which ends up overwhelming the KRA system.

“The problem with us as Kenyans is that we wait until the last minute, then we jam the system with so much filings,” he said.

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