Ruto unveils tax relief for low-income earners as Kenyans seek respite from rising costs

The President’s Mashujaa Day package promises lower deductions, cheaper phones and 50,000 internship places — but Parliament must first approve every word of it

By Collins Kibet

President William Ruto yesterday announced a package of proposed tax and economic measures at the Mashujaa Day celebrations in Eldoret, including exempting workers earning KSh32,333 or less per month from Pay As You Earn income tax, scrapping import duty on mobile phones and expanding the national internship programme by 50,000 places from January 2027.

The announcements, made at Kipchoge Keino Stadium in Uasin Gishu County before thousands of Kenyans, were framed as a direct response to mounting public pressure over the cost of living, unemployment and the affordability of basic necessities. Ruto said the measures were intended to put more money into the pockets of hardworking Kenyans and strengthen household purchasing power. The proposals must, however, go to Parliament for approval before any changes take legal effect — a distinction the government will need to communicate clearly to avoid confusion between intention and implementation.

At the centre of the package is the proposed PAYE exemption for employees earning KSh32,333 or less monthly. PAYE is the system through which employers deduct income tax from salaries and remit it to the Kenya Revenue Authority. For workers on modest wages, even small deductions bite hard against the cost of rent, food, school fees and transport. If approved, the exemption could leave qualifying employees with a meaningful, if modest, improvement in take-home pay. The actual benefit will depend on the final legal provisions, the eligible population and the date the change takes effect. The government has yet to explain how the resulting revenue shortfall will be accommodated within a budget already under pressure.

The second measure proposes exempting land transactions valued at KSh1M or below from stamp duty, with progressive rates applied to higher-value deals. Stamp duty forms part of the upfront cost of transferring property and can be a significant barrier for lower-income buyers seeking to secure land for homes or small investments. The relief is meaningful, though stamp duty is only one component of property acquisition costs. Legal fees, registration charges and survey expenses will continue to apply, limiting the full affordability gain for the most financially stretched buyers.

The third proposal — removing the 25 per cent import duty on mobile phones — reflects a broader government argument that smartphones are no longer consumer luxuries but essential tools for education, digital banking, business and online employment. Implementing the change will require navigating regional customs frameworks. Whether consumers ultimately see lower retail prices will depend on how importers and retailers respond, alongside exchange rate movements, distribution costs and market competition. The direction of travel, however, is the right one.

The fourth measure targets youth unemployment through an expanded National Internship Programme. An additional 50,000 places are planned from January 2027, with participants receiving monthly stipends and structured workplace experience. Ruto said recruitment would follow a digital, merit-based process, with incentives pursued to draw private employers into the scheme. The proposal addresses a well-documented trap facing graduates: employers demand experience, yet first opportunities remain elusive. For university, TVET and Kenya Medical Training College graduates, additional internship places could provide a genuine bridge between education and employment — provided the placements are meaningful, the funding is secured and transparency governs the selection process.

The announcements arrive at a politically charged moment. With the 2027 General Election moving steadily into view, the government is acutely aware that economic frustration has been building across households of every income level. Tax relief, cheaper technology and youth employment programmes are precisely the kind of visible, tangible commitments that resonate with voters — and precisely the kind that invite scrutiny when implementation lags behind rhetoric.

Parliament’s role will be decisive. Legislators will need to examine the fiscal implications of each proposal, assess the revenue impact and satisfy themselves that the intended benefits justify the costs. Competing budgetary demands — education, healthcare, infrastructure and social protection — do not disappear because a Mashujaa Day speech has been made.

The distribution of benefits also warrants honest assessment. Workers outside the formal PAYE system — casual labourers, informal traders, subsistence farmers and the unemployed — will not benefit directly from a salary-tax exemption. Cheaper phones and reduced property transaction costs may reach some of these groups indirectly, but the economic challenges facing Kenya’s informal majority require broader and more deliberate intervention.

For the millions of Kenyans who welcomed yesterday’s announcements with cautious hope, the questions are familiar and reasonable. Will the legislation be drafted promptly? Will the administrative procedures be transparent? Will the benefits reach those who need them most, or dissipate somewhere between the announcement and the implementation?

Ruto has made the promise. Parliament must now test it, and Kenya will watch closely to see whether the morning after Mashujaa Day looks any different from the one before it.

The post Ruto unveils tax relief for low-income earners as Kenyans seek respite from rising costs appeared first on The Mt Kenya Times.