New Proposal on PAYE Cuts as CS Mbadi’s Plan Delays

Hello and welcome to the Money News Roundup Newsletter, where we unpack banks’ fresh push for PAYE tax cuts after the Treasury shelved the proposed relief measures. We also look at the fuel shortages hitting petrol stations across the country amid recent EPRA price hikes.

Banks Push for 5% PAYE Cut Across All Salary Bands

The Kenya Bankers Association (KBA) is pushing the government to introduce PAYE tax cuts across all income bands after the Finance Bill 2026 excluded relief measures earlier promised to salaried workers.

In a proposal published by the association, KBA is proposing a uniform 5% reduction in PAYE rates and wants the highest tax band capped at 30%, matching the corporate tax rate.

Under the proposal, workers earning below Ksh30,000 would be fully exempt from PAYE.

As reported by the Kenyan Wall Street, earnings between Ksh30,001 and Ksh50,000 would attract 15% tax, Ksh50,001 to Ksh100,000 would be taxed at 20%, Ksh100,001 to Ksh400,000 at 25%, while income above Ksh400,000 would face a 30% rate.

The association estimates the reforms would inject Ksh28.1 billion into household disposable income annually, generate Ksh42 billion in GDP output, and support 36,000 jobs.

Treasury omitted PAYE relief from the Finance Bill, citing fiscal pressure linked to reduced fuel VAT and slowing economic growth.

While Treasury CS John Mbadi maintained that the PAYE relief was still being considered for inclusion in the Finance Bill 2026 as an amendment, he remained non-committal on whether the plan would be implemented.

Also Read: All You Need to Know About the Sanlam Allianz Balanced Fund With a 32.3% Return

‍ Fuel Stations Hit by Stock-Outs as Subsidy Delays Trigger Cash Crisis

Fuel stations across the country are facing stock-outs as oil marketers struggle to lift fuel from Kenya Pipeline due to mounting cash-flow problems linked to delayed subsidy payments estimated at Ksh17 billion.

The Business Daily notes that major dealers have reportedly been affected, triggering panic buying among motorists fearing fuel shortages.

Industry players say marketers are unable to restock because they must pay taxes upfront before accessing fuel from KPC, yet rising fuel costs and unpaid subsidies have strained their finances.

The State reportedly owes oil marketers Ksh6.04 billion for the subsidy cycle ending April 14, alongside Ksh1.7 billion in verified but unpaid claims and another Ksh9 billion awaiting verification.

Meanwhile, in its May fuel review, as reported by the Star, EPRA  increased diesel prices by Ksh46.29 per litre, pushing the retail price in Nairobi to Ksh242.92.

Super petrol prices have also risen by Ksh16.65 per litre and will now retail at Ksh214.25 in Nairobi under the latest monthly fuel review. EPRA said the sharp increase was driven by higher landed costs recorded in April 2026.

Posta to Close 125 Post Offices, Lay Off 460 Staff in Restructuring Drive

The Postal Corporation of Kenya (Posta) is set to close 125 of its 625 post offices and lay off about 460 employees as part of a major profitability restructuring plan.

According to Posta, nearly half of the targeted branches have already been shut, with the remaining offices expected to close by the end of next month.

As reported by Nation, the restructuring will reduce Posta’s workforce from 1,990 employees to 1,530.

Posta says the closures are meant to reduce the cost of operating commercially unviable branches, which the corporation estimates currently cost it about Ksh1.012 billion annually.

In Nairobi, branches that have already been closed or targeted for closure include Village Market, Enterprise Road, and Jamia Post Office in the CBD.

Customers with postal boxes in affected branches will be transferred to nearby post offices.

Bank CEOs Pocket Ksh817 Million Bonuses After Record Profits

Bonuses paid to CEOs of Kenya’s listed banks jumped 26.5% to Ksh817 million, driven by record profits and increased shareholder dividends.

As reported by the Business Daily, Co-operative Bank CEO Gideon Muriuki received the highest payout at Ksh307.7 million, followed by KCB Group CEO Paul Russo at Ksh158.09 million.

Equity Group CEO James Mwangi earned a Ksh90.8 million bonus after a two-year break, while NCBA’s John Gachora received Ksh92 million.

Stanbic Holdings CEO Patrick Mweheire earned Ksh78.39 million, Absa Kenya’s Abdi Mohamed got Ksh38.45 million, and Standard Chartered Kenya’s Kariuki Ngari received Ksh37.47 million.

At I&M Group, regional CEO Kihara Maina earned Ksh14.53 million, while Group Executive Director Sarit Raja Shah received Ksh26.26 million.

The bonuses came as the banking sector posted strong earnings growth, with eight listed banks recording combined profits of Ksh268.97 billion and increasing dividend payouts to shareholders by 31.6% to Ksh111.2 billion.

Homes, Businesses Face New Electricity Tariffs From July

Homes and businesses could start paying higher electricity bills from July 1 after Kenya Power submitted proposed new tariffs to EPRA.

EPRA acting director-general Joseph Oketch said stakeholder review meetings are already underway as Kenya Power and other State energy agencies seek increased funding for projects, operations, and maintenance.

The proposed tariffs remain undisclosed, but Kenya Power is seeking more funds to upgrade the ageing and overstretched electricity distribution network blamed for frequent blackouts.

Under the Energy Act 2019, electricity tariffs are reviewed every three years. The current review will determine tariffs running until June 2029. Electricity prices have generally declined over the current tariff cycle, with the cost of 200kWh dropping to Ksh5,656.88 last month from Ksh6,349.80 in April 2023. Read more

Asahi Gets Approval to Acquire Majority Stake in EABL Without Buyout Offer

Asahi Group Holdings Ltd has received regulatory approval to proceed with its acquisition of a majority stake in East African Breweries PLC (EABL) without making a mandatory takeover offer to minority shareholders in Kenya, Tanzania, and Uganda.

The Japanese company said regulators in the three East African markets approved exemptions under their takeover and mergers regulations following Asahi’s planned acquisition of 100 per cent of Diageo Kenya Limited shares from Diageo Holdings Netherlands B.V.

As reported by Capital Business, the transaction will indirectly give Asahi control of 65 per cent of EABL’s issued share capital.

The approvals were granted by Kenya’s Capital Markets Authority, Tanzania’s Capital Markets and Securities Authority, and Uganda’s Capital Markets Authority.

EABL is listed on the Nairobi Securities Exchange and cross-listed on the Dar es Salaam and Uganda securities exchanges.

However, the transaction still requires antitrust approvals in the three countries before completion.

KCB Seeks Ksh7 Billion From Sale of Contested Mavoko Land

KCB Group is seeking to recover about Ksh7 billion through the disposal of 2,000 acres of land in Mavoko, Athi River, acquired from East Africa Portland Cement Company (EAPCC) in settlement of a Ksh6.8 billion loan.

The land, however, is occupied by squatters, households, hotels, and warehouses, setting up a possible conflict as the bank moves to dispose of the property.

KCB disclosed in its 2025 annual report that it transferred properties worth Ksh6.99 billion from its investment book to assets available for sale, signalling plans to liquidate the land.

The lender said it prefers regularising ownership for willing occupants instead of carrying out evictions and is even willing to offer loans to settlers to formally acquire the plots.

KCB CEO Paul Russo said the land legally belongs to the bank after EAPCC transferred it in exchange for unpaid loans approved by the Central Bank of Kenya. Read more

KMRC Raises Ksh3 Billion After Bond Offer Is Oversubscribed by 312%

Kenya Mortgage Refinance Company (KMRC) has raised Ksh3 billion through its second sustainability bond after attracting bids worth Ksh9.38 billion, translating to a 312.8% oversubscription rate.

As reported by the Kenyan Wall Street, the eight-year amortising note, issued under KMRC’s Ksh10.5 billion Medium-Term Note programme, was priced at a coupon rate of 12.2% per annum payable semi-annually.

KMRC accepted the full Ksh3 billion target without exercising a green-shoe option, leaving Ksh6.38 billion in unallocated bids.

The funds will be used to refinance eligible green and social home loans under the company’s Sustainable Finance Framework, alongside concessional funding from the World Bank and African Development Bank.

KMRC said the bond will be listed on the Nairobi Securities Exchange on May 25, with the first redemption scheduled for November 2026.

Kenya Airways Partners With Accor to Link Flight and Hotel Loyalty Points

Customers will now be able to earn and redeem loyalty points across flights, hotel stays, and travel experiences following a partnership between Kenya Airways and hospitality group Accor.

As reported by Capital Business, the agreement links Kenya Airways’ Asante Rewards programme with ALL Accor, the hotel group’s global booking and loyalty platform, allowing members to convert points between the two programmes.

Under the arrangement, 3,000 Asante Rewards points can be exchanged for 1,000 ALL Accor Reward points, while 3,000 ALL Accor points can also be converted into 1,000 Asante Rewards points.

The partnership gives Kenya Airways customers access to Accor’s network of more than 5,800 hotels in over 110 countries, including brands such as ibis, Novotel, Sofitel, Fairmont, and Raffles.

Kenya Airways said it is the first African airline to join the Accor loyalty ecosystem.