Kenya President Ruto signs tax laws extending fuel VAT relief

President William Ruto has signed the Tax Laws (Amendment) Bill, 2026, and the Kenya Revenue Authority (Amendment) Bill, 2026, into law. The primary measure extends the reduced Value Added Tax (VAT) on petroleum products—including petrol, diesel, and paraffin—from the standard 16 per cent to 8 per cent for an initial 90 days.

This relief aims to cushion households and businesses from volatile global oil prices and disruptions caused by conflicts in the Middle East. The National Treasury Cabinet Secretary has the authority to extend this 8 per cent rate for an additional 90 days if international market conditions do not improve. Without this extension, fuel prices in Nairobi would have risen by approximately Sh17 per litre.

The legislation also introduces reforms to excise duties on construction materials, such as tiles, glass, and sanitary ware, to lower building costs and support the housing sector. Additionally, the Kenya Revenue Authority (Amendment) Bill introduces changes to strengthen the agency’s governance and operational efficiency to enhance revenue collection.