The World Bank has proposed a review of Kenya’s income tax brackets to alleviate the burden on low- and middle-income earners and enhance fairness in the tax system. These changes would directly affect how much money you take home after deductions. This means Kenyans may be taxed differently based on their monthly income under the proposed changes in the Finance Bill 2025, particularly if they earn above Ksh 24,000.
These suggestions coincide with the treasury's efforts to implement a more progressive tax system, whereby contributions increase in proportion to income. This strategy is suggested by the World Bank in order to relieve the strain on low-income workers and encourage more people to enter the formal labor market. By putting more money in their pockets, lower earners' consumer spending is also intended to increase.
For example, individuals making between Ksh.24,000 and Ksh.32, 333 might have their tax rate lowered from 25% to 15%, freeing up more cash for other uses. Similarly, the rate could be reduced from 30% to 25% for earners between Ksh.32, 334, and Ksh.166, 667.
On the flip side, those with greater incomes might have to pay more in taxes. Your tax rate may increase from 32.5% to 35% if you make between Ksh.500, 000, and Ksh.800,000, and it may reach 38% if you make over Ksh.800,000.
It is interesting to note that the same World Bank report found that Kenyan civil servants use taxpayer-funded official travel to the United States to spend about Ksh.67,000 per day. This calls into question the efficiency of the use of public funds and highlights the need for citizens to continue to monitor national spending and tax reforms.
This is about your monthly budget, your capacity to save, and your stability in the future, not just policy talk. The public is still debating the Finance Bill 2025. The time to read, comprehend, and engage is now.
Did you know you can share your opinion with Parliament through an online form? The link to submit your views is https://t.co/1bfiESaNix. Your voice is your power.
