- President William Ruto assented to two tax Bills at Eldoret State Lodge in Uasin Gishu County on Friday, October 16, 2026
- The Tax Laws Amendment Bill retains the reduced 8% VAT rate on petroleum products for 90 days, with provision for a further extension
- The Kenya Revenue Authority Amendment Bill revises board composition and guarantees KRA at least 2% of its estimated annual revenue collections
TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting, offering insights into Kenyan and global economic trends.
President William Ruto has signed two pieces of tax legislation into law, retaining a reduced VAT rate on fuel and overhauling key aspects of the Kenya Revenue Authority's governance structure.
Source: Twitter
Ruto assented to the Tax Laws Amendment Bill, 2026, and the Kenya Revenue Authority (Amendment) Bill, 2026, at Eldoret State Lodge in Uasin Gishu County on Friday, October 16, 2026, after both Bills cleared the National Assembly.
What is fuel VAT?
The Tax Laws Amendment Bill locks in the 8% VAT rate on petrol, diesel, and paraffin for an initial 90 days.
The Cabinet Secretary for the National Treasury may extend that period by a further 90 days through a Gazette notice.
Deputy Chief of Staff Josephat Nanok, who briefed the president ahead of the signing, said the measure was designed to protect Kenyans from the economic ripple effects of ongoing instability in the Middle East.
"The bill maintains the 8% VAT rate on petroleum products, including petrol, diesel and paraffin, to cushion Kenyans from the economic impact of the crisis in parts of the Middle East," Nanok said.
Nanok noted that the reduced rate had already been incorporated into fuel price calculations by the Energy and Petroleum Regulatory Authority (EPRA) and the Ministry of Energy.
"Had that 8% not been factored, the price of fuel announced by EPRA was going to be higher than announced," he added.
Beyond fuel, the legislation also reforms the taxation of construction materials. Excise duty on tiles shifts to KSh 400 per square metre, replacing the previous weight-based approach.
Duty on ceramic sanitary ware, including sinks, drops from KSh 50 to KSh 30 per kilogramme. The Bill further updates the description of imported flat glass to bring it in line with East African Community protocols.
KRA Board and funding changes
The Kenya Revenue Authority (Amendment) Bill makes structural changes to how the tax authority is governed and funded.
It removes the "ex-officio member" designation from provisions covering specified government officials and brings the managing director of the Kenya Ports Authority onto the KRA board.
On the financial side, the amendment guarantees KRA a minimum allocation of 2% of its estimated annual revenue collections as reflected in the government's financial estimates.
Which reforms did the IMF propose?
In other news, we also highlighted facts about the IMF’s 12 proposed tax reforms, which aim to support economic growth through better tax design rather than higher rates.
The proposals target areas including VAT exemptions, investment costs and R&D incentives, alongside stronger tax administration.
The IMF says these changes could help countries pursue growth while preserving government revenue.
Source: TUKO.co.ke