The Cabinet has given its nod to the Finance Bill 2025, with key changes approved that will change how employers calculate Pay As You Earn (PAYE) taxes for employees. Employers will be required to automatically apply all eligible tax reliefs and exemptions when calculating Pay As You Earn (PAYE) taxes for employees. This is after the Cabinet took note of the current situation, where many employers omit the reliefs, forcing their employees to seek refunds from the Kenya Revenue Authority (KRA). ''Employers will also be required to automatically apply all eligible tax reliefs and exemptions when calculating Pay As You Earn (PAYE) taxes for employees," reads part of the Cabinet dispatch.
Adding, "Currently, many employers omit these reliefs, forcing employees to seek refunds from the Kenya Revenue Authority.
These reforms underpin the Bottom-Up Economic Transformation Agenda (BETA) and reinforce the government's commitment to building a stronger, more inclusive economy." According to the Cabinet, the changes will be part of government efforts to minimise tax-raising measures in the preceding financial years. More to follow:
