In a move that has sent ripples of relief through Kenya’s working class, Treasury Cabinet Secretary John Mbadi has announced a sweeping tax holiday for the country's lowest earners. "You pay zero," declared the CS, promising that any Kenyan earning less than KSh 30,000 a month will soon be exempt from Pay As You Earn (PAYE).

The announcement, made at the Kiambu National Polytechnic, represents a significant shift in the government's fiscal strategy. Faced with a stagnating economy and a populace crushed by the cost of living, the state is pivoting from aggressive collection to strategic relief. The goal is simple: put money back in pockets to kickstart consumption.

The Relief Package

The proposed Tax Laws Amendment Bill outlines a tiered relief system designed to cushion the "hustlers" at the bottom of the pyramid:

• Below KSh 30,000: 100% exemption from PAYE. For a worker on the threshold, this could mean an extra few thousand shillings monthly—the difference between a meal and hunger.
• KSh 30,000 - KSh 50,000: A 5% reduction in the tax rate, lowering it to 25%. This targets the lower-middle class, who have borne the brunt of recent levies.

"We have looked at the economy, and we can see it choking," Mbadi admitted with rare candor. "People don't have money to buy from you."

Stimulus or Strategy?

Economists are viewing the move as a desperate bid to revive aggregate demand. With household consumption plummeting, businesses are closing, and tax revenues are paradoxically falling. By unshackling the purchasing power of over 1.5 million workers, the government hopes to create a multiplier effect that revitalizes the grassroots economy.

However, questions remain about how the Treasury will plug the revenue gap. Mbadi hinted at aggressive privatization and focusing on other tax heads, but the immediate impact is political gold. "The government should come for me and leave that person," Mbadi said, positioning himself as the shield for the poor.

The Road Ahead

The proposal now heads to Parliament, where it is expected to face little opposition—few MPs would dare vote against a tax cut in an election cycle. For the millions of Kenyans counting every coin, Mbadi’s announcement is the first glimmer of hope in a long, dark economic winter.