The National Treasury has defended the absence of immediate Pay As You Earn (PAYE) relief measures in the Finance Bill 2026, following criticism from lawyers, economists, and salaried workers. In a statement shared with Kenyans.co.ke on Saturday, the Treasury cited fiscal constraints and the need to balance revenue collection with economic growth.
The Treasury noted that the Finance Bill 2026 focuses on broadening the tax base and improving compliance rather than reducing rates. It argued that immediate PAYE cuts would reduce government revenue, potentially affecting funding for essential services such as health and education.
Critics, including the Law Society of Kenya and the Institute of Economic Affairs, have called for tax relief to ease the burden on salaried workers amid rising living costs. However, the Treasury maintained that the bill includes targeted measures for low-income earners and small businesses, such as increased tax thresholds and simplified filing processes.
The Finance Bill 2026 is currently under review by the National Assembly's Finance Committee, with public participation sessions scheduled for May 2026. The Treasury has urged stakeholders to engage constructively in the legislative process.
