Speaking during the official opening of the Kenya Comprehensive School Heads Association (KECSHA) meeting in Mombasa on Thursday, November 12, Ruto said the government intended to increase the monthly PAYE tax-free threshold from Ksh24,000 to Ksh32,000.
The President explained that under the proposed changes, employees would only pay PAYE on taxable income exceeding Ksh32,000, compared to the current arrangement, which exempts the first Ksh24,000 from taxation.
Ruto maintained that increasing the tax-free threshold by Ksh8,000 would translate into monthly tax savings of approximately Ksh2,000 for employees falling within the 25 per cent tax bracket.
Using a teacher earning Ksh50,000 monthly as an example, the President explained that the employee would pay Ksh750 through the 1.5 per cent Housing Levy but save Ksh2,000 through reduced PAYE deductions.
According to Ruto, the proposed adjustments would leave such a teacher with an additional Ksh1,250 in monthly take-home pay after accounting for the Housing Levy contribution.
The President also defended the Affordable Housing Programme, arguing that it had created employment opportunities while supporting the construction of residential houses, markets and student accommodation facilities across the country.
He disclosed that approximately 1.1 million people were working under the housing initiative, while contracts covering houses, markets and student hostels had reached a combined value of Ksh1.2 trillion.
Ruto further revealed that accommodation facilities capable of hosting more than 180,000 learners were under construction, maintaining that the proposed PAYE reforms would provide workers with financial relief while allowing the housing programme to continue.
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