(ELDORET, KENYA) – Kenya has announced plans to cut income tax for low earners, exempt cheap land deals from stamp duty and remove import duty on mobile phones, measures worth billions of shillings in relief to households.
Workers earning less than KES32,333 ($250) a month will pay reduced income tax, with those at that level paying KES2,083 ($16) in monthly pay-as-you-earn tax after personal relief.
Property buyers will save KES40,000 ($309) in urban areas and KES20,000 ($154) in rural areas on deals valued at KES1 million ($7,725) after the removal of stamp duty on transactions below that threshold.
The government will also remove the 25% import duty on mobile phones in a move meant to lower the cost of devices used for banking, education, communication and digital work.
A paid internship programme will expand to 50,000 graduates from January, up from about 10,000, with each intern receiving a monthly stipend of KES25,000 ($193).
The measures were announced on Tuesday by President William Ruto in his Mashujaa Day address.
“These measures address four barriers that Kenyans confront every day: the burden of taxation on modest incomes, the cost of acquiring property, the expense of accessing digital opportunities and the difficulty of entering the labour market,” Mr Ruto said.
The tax relief comes as the government seeks to win back voters ahead of the general election in August next year. Mr Ruto’s administration has introduced several new taxes and raised old ones since he took office in August 2022.
Those decisions proved unpopular with many Kenyans who believe he has broken his campaign pledge to champion the interests of ordinary workers.
The Kenya Bankers Association estimates that workers’ purchasing power has fallen by up to 12% over the past five years because of rising taxes, multiple statutory deductions and the high cost of living.
The association, which had proposed a uniform 5% cut in pay-as-you-earn tax across all income bands, said in May that household purchasing power had dropped by between 10.7% and 12%.
Besides the tax cuts, Mr Ruto is counting on faster economic growth and higher farm earnings from sugar, coffee and dairy to create jobs and ease poverty.
Kenya’s economy grew 5.1% in the second quarter of 2026, compared with 4.9% in the same period last year, the statistics office said on Friday. Growth was mainly supported by transport and storage, accommodation and food services.
Other sectors that recorded notable growth included electricity, information and communication technology, financial services and construction.
Earlier Treasury proposals had sought to raise the threshold of untaxed income from KES24,000 ($185) to KES30,000 ($232), with income between KES30,000 and KES50,000 ($386) taxed at a lower rate of 25%. Currently, income above KES32,333 attracts a tax rate of between 25% and 30%.
Under the current bands, the first KES24,000 of monthly taxable income is taxed at 10%, while the next KES8,333 attracts 25%, with residents receiving personal relief of KES2,400 ($19) a month.
For land buyers, the government proposes scrapping stamp duty on transactions valued below KES1 million and introducing progressive rates for more expensive transfers.
“These measures will help reduce the cost of acquiring and transferring land, strengthen security of land ownership and make property ownership more accessible to ordinary Kenyans,” Mr Ruto said.
Stamp duty on property transfers is currently charged at 4% of the property’s value in urban areas and 2% in rural areas, a significant extra cost for buyers already raising money for land.
The savings would lower the upfront cost of registering property, leaving buyers to meet other costs such as legal, valuation and registration fees where applicable.
The duty on mobile phones currently adds a quarter of the device’s customs value before other taxes and commercial margins are added to the final price. Phones are also subject to value-added tax and excise duty.
The internship programme is intended to help young people overcome the experience barrier that often stops fresh graduates from securing their first formal job.
“Too many young people cannot secure employment without experience, yet cannot gain experience without employment,” Mr Ruto said.
“This programme is intended to break that cycle by providing a pathway from education to practical and productive workplace experience and, ultimately, meaningful employment.”
The expanded internship scheme will require an annual budget allocation of at least KES15 billion ($116 million) to pay the stipends.