Mbadi’s PAYE Cuts Extended to Kenyans Earning Ksh50,000 & Below 

Hello and welcome to the Money News Roundup Newsletter, where we are covering new proposed rates of PAYE. We also cover schools exposed for overcharging school fees.

Mbadi’s PAYE Cuts Extended to Kenyans Earning Ksh50,000 & Below 

Treasury Cabinet Secretary John Mbadi has proposed exempting Kenyans earning Ksh30,000 and below from Pay As You Earn (PAYE) tax, a move aimed at easing the cost-of-living burden on low-income earners.

The new proposal will also see a lower tax rate for those earning between Ksh30,000 and Ksh50,000. The current 30% rate, which applies to incomes starting at about Ksh33,000 will be reduced to 25%. 

For example, an individual earning Ksh50,000 would pay no tax on the first Ksh30,000, while the remaining Ksh20,000 would be taxed at 25%.

As reported by the Star, the proposal, still subject to parliamentary approval, comes after consultations with President William Ruto, who directed that it be urgently taken to Parliament.

Speaking during the People’s Dialogue Forum in Meru, Mbadi said the government will not introduce additional taxes but is instead pursuing measures to reduce taxation while limiting reliance on excessive borrowing.

Currently, Kenya has about 3,065,165 salaried workers, with roughly 1.5 million falling into the income bracket being targetted.

At the same time, the government plans to increase compliance among informal and non-salaried earners using KRA systems rather than enforcement, ensuring fairness in the tax net.

Auditor Flags Starehe Schools for Charging Up to Ksh300,000 in Illegal Fees

Starehe Boys and Girls under scrutiny for charging parents up to Ksh300,000 in school fees in 2024, defying a Ministry of Education cap of Ksh67,244.

An audit by Auditor-General Nancy Gathungu found that Starehe Boys Centre charged between Ksh140,000 and Ksh300,000. The schools indicated that there was an agreement with parents that fee payment be based on the ability of the parents.

As reported by the Business Daily, Starehe Girls Centre charged Ksh150,000 against an approved fee of Ksh53,554.

The audit revealed Starehe Girls overcharged each student by Ksh96,446 in one year without approval from the Education Cabinet Secretary, breaching a 2022 directive barring fee increases. Starehe Boys also raised fees without authorisation, collecting Ksh92.6 million from parents.

Beyond fees, the schools were faulted for weak governance. Starehe Boys lacked 28 teachers and a substantive principal, while Starehe Girls operated without a PTA and denied parents representation on its Board of Management, despite holding assets worth about Ksh3.4 billion.

CBK Warns Against Using Banknotes for Decorations 

The Central Bank of Kenya (CBK) has warned the public against using banknotes for decorative purposes, citing rising cases of cash being used in flower bouquets and ornamental displays. 

As reported by the Star, CBK said such practices often involve folding, rolling, gluing, taping, stapling or pinning notes, which damages them and makes them unfit for circulation.

The Bank noted that damaged notes interfere with ATMs, cash-counting and sorting machines, leading to frequent rejection and costly early replacement. While cash gifts are allowed, CBK stressed that currency must not be altered, defaced or impaired.

CBK also cited Section 367 of the Penal Code, which criminalises defacing currency. The Bank urged Kenyans to use non-damaging alternatives and handle banknotes responsibly to preserve their integrity.

Uber Exits Tanzania After Fare and Commission Standoff With Regulators

Uber has exited Tanzania after years of clashes with regulators over fares, commissions and control.

The taxi hailing company stopped operations in the country on January 30, 2026.

As reported by Techcabal, its departure narrows options for riders in Dar es Salaam and other cities, leaving more space for local and regional apps like Little and Bolt, which have adapted better to regulation. 

The dispute centres on rules by Land Transport Regulatory Authority (LATRA), which sets guide fares, minimum prices and caps commissions, limiting how platforms adjust pricing when fuel costs or demand change.

Tensions peaked in 2022 when commissions were capped at 15%. Although eased to about 25% in 2023, uncertainty remained.

UK Overtakes Saudi Arabia as Kenya’s Second-Biggest Source of Remittances

The United Kingdom has overtaken Saudi Arabia as Kenya’s second-largest source of diaspora remittances for the first time in three years, reversing a ranking held by the Gulf country since 2023.

CBK data shows UK inflows rose by 0.72% to Ksh46.47 billion in 2025, edging past Saudi Arabia, where remittances fell by 25.06% to Ksh38.97 billion.

As reported by Eastleigh Voice, the drop reflects higher remittance costs and labour reforms in Saudi Arabia that disrupted wages and contracts for Kenyan workers.

Saudi inflows retreated from a 2024 high of Ksh52 billion. Diaspora groups cite a 15% VAT on transfer fees, pushing some workers to save locally or use informal channels. Average monthly inflows from Saudi Arabia fell to Ksh3.2 billion.

Govt to Borrow Ksh1Trillion Domestically in 2026/27 FY

The government plans to borrow Ksh1 trillion from the local market in 2026/27, raising concerns over credit access for small businesses and ordinary borrowers.

As reported by Nation, lenders are expected to favour government loans due to guaranteed repayment and higher returns, crowding out Micro, Small and Medium Enterprises (MSMEs), which employ about 15 million people and contribute over 40% of GDP.

A draft Budget Policy Statement shows a fiscal deficit of Ksh1.11 trillion, financed through Ksh1.01 trillion domestic borrowing and Ksh99.5 billion external loans. 

Credit to MSMEs has already dropped from 7.9% to 0.2%, while lending to the government doubled from 8.6% to 16.4%. Kenya’s public debt now stands at Ksh12.1 trillion, or 69% of GDP, exceeding the IMF threshold of 50%. Experts warn increased borrowing could strain private-sector financing further.

Chinese EV Company Rideence Invests Ksh320M in Mombasa Plant to Cut Prices by 25%

Chinese-owned EV dealer Rideence Africa is investing Ksh320 million in a vehicle assembly line in Mombasa to cut prices by up to 25% using tax incentives for local production.

 The firm has partnered with Associated Vehicle Assemblers (AVA) to assemble electric hatchbacks from CKD kits supplied by Beijing Henrey and 16-seater vans from Jiangsu Joylong.

 About 132 hatchbacks and 20 vans will be assembled by the end of February.

Rideence leases its Xiaohu FEV taxis to Nairobi drivers and sells the cars for between Ksh2.5 million and Ksh2.8 million. 

EV assemblers are exempt from 35% import duty, enjoy lower excise duty and VAT exemptions. Rideence says local assembly will lower costs, raise output to up to 10 vehicles a day and boost local content beyond 25% by 2026. Read more

Kenya Power Hikes Interim Dividend by 50% to Ksh0.3 per Share 

Kenya Power has raised its interim dividend by 50% to Ksh0.3 per share for the half-year ending December 2025, up from Ksh0.2 a year earlier, following a net profit increase to Ksh10.4 billion from Ksh9.9 billion. 

As reported by the Business Daily, the dividend will be paid on March 27 to shareholders on the register by February 23.

Profit growth was driven by a 6.9% rise in electricity sales to Ksh114.87 billion, improved distribution efficiency, and lower finance costs. Operating expenses rose by Ksh1.43 billion due to higher credit loss provisions, depreciation, and staff costs. 

Total borrowings fell six percent to Ksh84.23 billion, aided by the strong shilling. Kenya Power plans to retire all foreign currency commercial debt by June, while continuing grid modernisation and loss reduction programmes to improve service reliability and financial sustainability.

NSE Gold ETF Drops Following Trump’s Fed Nomination

Gold prices at the Nairobi Securities Exchange (NSE) fell as the global rally reversed, with the Absa NewGold ETF dropping to Ksh5,845 on Monday from Friday’s Ksh6,235 and a record high of Ksh6,600 on Thursday.

The decline follows a stronger dollar after reports that US President Donald Trump would nominate Kevin Warsh to succeed Jerome Powell as Fed chair.

The ETF, backed by physical gold, allows Kenyans to invest in gold locally, offering a hedge against inflation without the risks of storing bullion. Since its NSE listing in 2017 at Ksh1,205 per unit, it has delivered 420% returns, though gains have eased recently to 8.2% year-to-date. 

As reported by the Business Daily, trading volumes surged, highlighting investor demand. Analysts say gold’s appeal remains strong amid geopolitical uncertainty, falling interest rates, and central banks’ ongoing purchases.