President William Ruto signed two tax bills into law on October 16, 2026, extending the 8% Value Added Tax (VAT) relief on petroleum products for another 90 days. The new law, effective October 15, 2026, reduces the VAT on fuel from 16% to 8%, a measure the government claims will ease financial pressure on citizens and businesses.
The Tax Laws Amendment Bill 2026 was approved at Eldoret State Lodge, where Ruto formally assented to the legislation. The extension of the VAT reduction aims to stabilize fuel prices and support economic activity during a period of inflationary pressures. The measure is part of broader fiscal adjustments intended to balance public spending with revenue generation.
This follows previous government efforts to adjust taxation to stimulate economic growth. The 8% VAT on fuel was first introduced as a temporary measure to reduce costs for consumers and transport operators. The latest extension reflects ongoing concerns about inflation and the need to maintain affordability for essential goods. The government has not provided specific targets for the impact of the tax cut, but officials have emphasized its role in maintaining economic stability.
