Kenyans earning Sh32,333 or less a month will no longer pay Pay As You Earn (PAYE) income tax under a proposal announced by President William Ruto during the Mashujaa Day celebrations at Kipchoge Keino Stadium in Eldoret on Tuesday, October 20, 2026. The President said the move is meant to put more money in the pockets of low-income workers as the cost of living rises.
“We have prepared a proposal to exempt Kenyans earning Sh32,333 per month or less from paying PAYE,” he said. He directed the National Treasury to table the proposals in Parliament next week. If approved, the change will raise the tax-free income band from the current Sh24,000 a month, the level at which personal relief cancels out tax under the existing rates.
The President said the relief would make a real difference to struggling households. “For workers on modest incomes, every shilling saved means more money for food, transport, school expenses and the needs of their families,” he said. The announcement comes as prices continue to rise, with annual inflation at 6.8 per cent in September 2026 and food prices up 9.5 per cent over the year.
The President also unveiled other measures to ease living costs. Under a proposal by the National Treasury, land transactions worth Sh1 million or less will be exempt from stamp duty, while higher-value deals will attract progressive rates. He said the change would “reduce the cost of acquiring and transferring land, especially for citizens at the bottom of the pyramid.”
The Government will also begin the legal and regional customs processes needed to remove the 25 per cent import duty on mobile phones. “A mobile phone is no longer a luxury,” he said. “It is a classroom, a marketplace, a bank, and an office for many young Kenyans.”
For young people, the National Internship Programme will recruit an additional 50,000 graduates from colleges, technical and vocational training institutions, Kenya Medical Training Colleges and universities from January 2027. Interns will be paid a monthly stipend and placed through a transparent, digital, merit-based system, with incentives for private employers to offer work experience.
“Too many young people cannot secure employment without experience, yet cannot gain experience without employment,” the President said. “This programme is intended to break that cycle.”
The President also announced an extra Sh5 billion for the Hustler Fund before the end of 2026. He said the fund had so far disbursed Sh98 billion in collateral-free loans and had more than 10 million regular borrowers.
He set out the Government’s broader record, noting that maize production had doubled from 34.3 million bags in 2022 to 71 million bags last year, and that the price of subsidised fertiliser had fallen from Sh7,500 to Sh2,000 a bag. Milk farmers, whose pay has risen from Sh35 to Sh60 a litre, will receive Sh65 a litre from this month, plus a quarterly bonus of Sh2.
Coverage under the Social Health Authority has grown to 33.3 million Kenyans, up from 7 million under the former National Hospital Insurance Fund in 2022.
On the economy, the President said the value of the Nairobi Securities Exchange had doubled from Sh2 trillion in 2022 to about Sh4 trillion, while foreign direct investment rose from $1.5 billion in 2022 to $3.2 billion in 2025. He added that exports of crude oil from the Lake Turkana Basin were expected to start in December.
Deputy President Kithure Kindiki urged Kenyans to build on 63 years of independence by focusing on economic empowerment and better livelihoods.
