KRA Rolls Out 2026 Tax Relief Proposals Targeting Persons with Disabilities, Caregivers, and Low-Income Workers

The Kenya Revenue Authority (KRA), acting on behalf of the National Treasury, has rolled out proposed tax exemptions and policy adjustments to cushion persons with disabilities, primary caregivers, and low-income earners while encouraging voluntary tax compliance.

1. New Tax Relief Framework for Persons with Disabilities and Caregivers

The KRA has opened public participation for the Draft Income Tax (Persons with Disabilities, Parents or Guardians Tax Exemptions) Regulations, 2026, inviting feedback from stakeholders and the general public until November 24, 2026.

Under the proposed framework, which seeks to replace the 2010 regulations, tax exemptions will introduce major structural changes:

• Relief for Parents and Guardians: For the first time, parents and legal guardians providing full-time care and custody to individuals certified with severe disabilities who cannot cater for their basic needs will be eligible for an additional KSh 10,000 monthly tax exemption. If adopted, this measure raises the monthly tax-free income threshold for qualifying caregivers from KSh 24,000 to KSh 34,000.
• Graduated Exemption Structure: Rather than applying a blanket exemption, tax relief for working persons with disabilities (capped at KSh 150,000 per month or KSh 1.8 million annually) will scale according to the severity of the disability as assessed by a joint committee of KRA, the National Council for Persons with Disabilities (NCPWD), and medical specialists. Under the proposed tiers, mild disabilities will no longer qualify, moderate conditions will attract a 30% exemption, severe conditions 60%, and the most severe impairments such as blindness or profound hearing loss will qualify for up to 100% exemption.
• Validity and Processing: Approved exemption certificates will remain valid for five years (with renewal required at least 90 days before expiry), though individuals assessed with permanent disabilities will be exempt from future medical reassessments and renewals. Applications will attract a non-refundable processing fee of KSh 1,000.

2. PAYE Relief Proposals for Low-Income Earners

Alongside targeted disability reforms, President William Ruto and the National Treasury have advanced proposals to review Pay As You Earn (PAYE) bands to cushion salaried workers against the rising cost of living.

Under the proposed personal income tax adjustments, workers earning KSh 32,000 to KSh 32,333 per month would be fully exempt from PAYE, a move designed to increase disposable household income and stimulate consumer spending.

3. Reminder on the 2026 Tax Amnesty Program

Meanwhile, the KRA is reminding taxpayers with historical tax arrears to take advantage of the ongoing Tax Amnesty Program under Section 37E of the Tax Procedures Act, which runs through December 31, 2026.

The program grants a 100% waiver on all accrued interest, penalties, and fines for tax liabilities covering periods up to December 31, 2025. To qualify, taxpayers must file any outstanding returns and settle their principal tax balances in full either as a lump sum or through an approved iTax payment plan on or before the December 31, 2026 deadline. Any principal taxes remaining unpaid after that date will attract full penalties and enforcement action.