For years, Kenya’s income tax system has left the lowest earners shouldering a burden they could hardly afford, while higher earners have escaped with relatively lighter tax obligations when adjusted for deductions. But this imbalance may soon shift if the government listens to the World Bank.
In its latest proposal, the global lender is urging Kenya to rethink how it taxes its citizens through the Pay As You Earn (PAYE) system. The changes being suggested to the Personal Income Tax (PIT) structure are not about cutting revenue they are about justice. The World Bank is calling for a tax model that recognizes the struggle of low-income earners, while ensuring that the wealthier carry their fair share of the load.
At the heart of the proposal is a redesign of Kenya’s tax bands. Currently, the system flattens income into broad categories that ignore nuance and as a result, someone earning just above the tax-free threshold may find themselves taxed at nearly the same rate as someone earning many times more. The World Bank wants to change that.
The suggestion is simple in principle but significant in impact: widen the income brackets, lower the rates for modest earners, and apply steeper rates only as income rises substantially. This could see workers currently surviving on modest monthly salaries finally catch a break, with real reductions in the tax they pay each month. Meanwhile, those bringing in higher incomes would see their contributions adjusted upward not punitively, but proportionally.
It’s a shift that acknowledges a truth many Kenyans live every day: that a tax system should not punish survival, but rather calibrate itself around the ability to pay. The proposed changes would be revenue-neutral the total money collected would remain steady but the way that money is collected would be more just.
Whether the Kenyan government takes up this proposal remains to be seen. But the moment calls for boldness and empathy. In a time of high living costs and economic pressure, recalibrating income tax isn’t just about numbers it’s about fairness. And that’s something worth striving for.
