Ruto signs 2 tax bills into laws, extends 8% fuel VAT relief

President William Ruto signed the Tax Laws Amendment Bill, 2026, on October 16, keeping an eight percent Value Added Tax (VAT) on petroleum products for 90 days. This measure aims to protect Kenyans from the economic impact of the crisis in the Middle East. The law retains the reduced VAT rate on petroleum products, which was previously 16 percent, down from the standard rate.

National Assembly Clerk Samuel Njoroge stated that the reduced rate would stay in force for 90 days, with the possibility of an additional 90-day extension if the Middle East situation does not improve. The aim is to safeguard the Kenyan economy from external shocks that could escalate fuel prices, raise transportation costs, and increase the cost of goods and services.

Additionally, the legislation modifies the taxation of imported tiles and ceramic products, reducing the tax rate for tiles from a weight-based to a square metre-based system, and decreasing ceramic tax from Sh50 to Sh30 per kilogram.