President William Ruto assented to the Finance Bill and the Appropriation Bill into law at State House, Nairobi, on Tuesday.
The President explained that the two laws will provide the legal framework and resources required to finance Kenya’s transformation priorities, create jobs, strengthen livelihoods and invest in more programmes and projects under the Bottom-Up Economic Transformation Agenda.
“The vision is clear, the agenda is set, the plan is funded and on course, the transformation is happening and, together, we are building the prosperous, inclusive and modern nation that we all deserve,” he said.
President Ruto cautioned Kenyans against falling for propaganda and misinformation about the Finance Act propagated by the opposition to advance their selfish cause.
“Together, we must reject propaganda, misinformation, disinformation, fake news, insults, hate, ethnic bigotry and profiling, and division,” he said.
He said the Finance Act, 2026, does not raise taxes that affect ordinary citizens.
Instead, he said, it improves fairness by strengthening compliance, closing loopholes and ensuring that every individual and business pays what is lawfully due.
“We are pursuing tax avoidance, not taxpayers; offshore schemes, not ordinary wages; and leakages, not livelihoods,” he said.
Contrary to misinformation, he explained, there are no taxes on freehold land, no taxes on mitumba, no changes on rental income tax, no tax on bottled water, no new tax on M-PESA or mobile money transactions, no new tax on mobile phones, airtime or data, and no new tax on locally manufactured packaging.
The President pointed out that the Finance law supports livelihoods through incentives for motorcycles, electric buses and bicycles, solar batteries and locally assembled mobile phones.
He added that the duty on imported sugar has been increased from KSh7.50 to KSh40 a kilo to protect local producers, safeguard 17 operational factories and support the livelihoods of 10 million Kenyans who depend on the sector.
He further noted that a six-month tax amnesty will waive penalties and interest on outstanding tax obligations while mortgage tax benefits previously available only through banks have been extended to borrowers in microfinance institutions.
He also announced that the duty-free allowance for returning travellers and Kenyans in the diaspora has been increased from KSh39,000 ($300) to KSh260,000 ($2,000).
President Ruto explained that tax incentives for projects implemented through public-private partnerships and the National Infrastructure Fund will lower delivery costs, accelerate implementation and support efforts to progressively reduce the country’s debt burden.
“This is what a fair tax system looks like: One that protects the vulnerable, rewards enterprise, promotes compliance and shares responsibility fairly,” he said.
On the Budget, the President noted that it invests in people, productivity and prosperity.
He said education has received the highest allocation at KSh784 billion, up from KSh526 billion in 2022, while funding for health has increased from KSh132.4 billion to KSh175.5 billion and agriculture from KSh44 billion to KSh63 billion.
On education, the President pointed out that 20,000 teachers on contract will be employed on permanent and pensionable terms, while a further 24,000 teachers will be recruited, bringing the total number hired under his administration to 124,000.
In higher education, funding for the Higher Education Loans Board has increased to KSh56.7 billion, while KSh40.4 billion has been allocated for university, Kenya Medical Training College and TVET scholarships.
He pointed out that KSh3 billion has been allocated for school feeding programmes to support 2.8 million vulnerable learners while KSh15 billion will be spent on construction of classrooms and laboratories, and the teaching of science, technology, engineering and mathematics education under the Competency-Based Education and Training system.
On healthcare, President Ruto noted that KSh19.1 billion has been allocated to primary healthcare, ensuring Kenyans registered under the Social Health Authority (SHA) can access outpatient services at accredited facilities without paying.
“As a result, no Kenyan should pay for outpatient services at dispensaries, health centres and sub-county health facilities in SHA-accredited public, private or faith-based hospitals,” he said.
He added that KEMSA funding has increased from KSh5 billion to KSh21 billion to strengthen the supply of medicines and medical commodities across the country.
On agriculture, President Ruto noted that funding for the sector has increased to KSh63 billion from KSh44 billion last year.
He explained that KSh20 billion has been allocated for seed and fertiliser subsidies, up from no allocation in 2022, helping maintain fertiliser prices at KSh2,500 a bag, down from KSh7,500 in 2022. He noted that 6.5 million farmers are already benefiting from the programme.
The President added that KSh5.4 billion has been allocated for food resilience programmes, KSh2.7 billion to support farmers and workers in the sugar sector, KSh2 billion to waive coffee farmers’ debts and KSh500 million for the Coffee Cherry Fund.
He further noted that young farmers will benefit from a KSh1.3 billion credit facility, while pastoralists resilience and livestock commercialisation programmes have received KSh3.3 billion and KSh1.3 billion respectively.
In addition, KSh5.5 billion has been allocated to support 300,000 pastoralist farmers in 21 arid and semi-arid counties through cooperatives.
Additionally, the President noted that KSh 110 billion has been committed to programmes targeting women, youth and vulnerable groups.
This includes KSh22.6 billion for youth programmes, KSh12.4 billion for the National Youth Service, KSh8.8 billion for affordable credit to small businesses and KSh25 billion for cash transfers benefiting 1.2 million vulnerable households.
To enhance access to justice and strengthen the rule of law, funding for the Judiciary has increased from KSh16 billion in 2022 to KSh30 billion in the financial year’s budget.
A total of KSh138 billion has been allocated to affordable housing and urban development.
“We are investing in housing, infrastructure, energy and digital connectivity because growth requires jobs, mobility and opportunity,” he said.
The President also highlighted major investments in infrastructure, energy and connectivity, including KSh225 billion for roads, KSh52 billion for transport infrastructure and KSh20.8 billion for the extension of the Standard Gauge Railway from Naivasha to Kisumu and Malaba.
To cushion Kenyans against fluctuations of fuel prices, KSh21.5 billion has been set aside for fuel stabilisation.
He also explained that KSh10.5 billion has been allocated to the digital economy to expand fibre connectivity, digitise government services and create more opportunities for young people.
At the same time, President Ruto said KSh112.4 billion has been allocated to water, sanitation and environmental protection projects, while KSh 9.4 billion has been set aside to address the longstanding land question at the Coast region through the settlement of landless families and squatters.
He further noted that investments in the blue economy will support the establishment of 15 fish landing sites and markets, rescue centres, rescue boats and expanded ferry services.
In sports, KSh26.4 billion has been allocated to complete 39 stadia, prepare for AFCON 2027 and support sportsmen and sportswomen who participate in sporting activities globally.
“The ultimate measure of this Budget will be the opportunities it creates and the lives it transforms,” he said.
The President also assented to the Supplementary Appropriation Act, 2026.
Present were Deputy President Kithure Kindiki, Prime Cabinet Secretary Musalia Mudavadi, National Assembly Speaker Moses Wetang’ula, ODM Party Leader and Senator of Siaya Oburu Oginga, and MPs led by National Assembly Majority Leader Kimani Ichung’wah.
