By Pascal Ndegwa - Reporter
Kenya, October 15, 2026 - Kenyan Parliament has passed two tax laws that most coverage has reduced to a simple story. The lower fuel tax continues and ceramic tiles become cheaper to import. They are significant yes, but they are not the most lasting ones.
The Tax Laws (Amendment) Act, 2026, formally National Assembly Bill No. 65 of 2026, keeps Value Added Tax on petrol, diesel and kerosene at 8 percent for another 90 days. Wonderful. However, it gives the Cabinet Secretary for the National Treasury the power to extend that rate for a further 90 days by publishing a notice in the Kenya Gazette.
This means a major tax rate can now be kept lower without a fresh decision by Parliament. A simple move to make major decisions. The provision was explicitly justified in the House as a response to the ongoing Middle East tensions, but the effect is a clear transfer of authority from the legislature to the executive.
The same law also changes the way excise duty is calculated on imported ceramic tiles and related bathroom ware. The previous system was based on weight. The new system uses surface area. Very interesting indeed.
During the debates about it, Majority Leader Kimani Ichung’wah told Parliament that a typical container of about 25,000 kilogrammes that previously attracted between 1.2 million and 1.5 million shillings in duty could now attract roughly 420,000 to 600,000 shillings.
The Finance and National Planning Committee, through its chair Kuria Kimani, supported the change as a way to ease construction costs.
These reliefs carry a documented fiscal cost. In the House, Kuria Kimani stated that the government had already forgone approximately 54 billion shillings over the preceding six months through earlier fuel tax relief. The next 90 days is expected to add further forgone revenue.
The second law, the Kenya Revenue Authority (Amendment) Act, 2026, makes structural changes to how the tax agency is financed and governed. Previously, the law said KRA could get up to 2 percent of the money the government expected to collect.
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In practice, this often meant they got less. The new law changes it to at least 2 percent. This means KRA is now guaranteed a minimum amount of money every year, instead of having to fight for it.
This change was explained in Parliament as a response to chronic under-funding. It locks in a minimum budget for the Authority and reduces its dependence on annual negotiations with the National Treasury.
The same Act introduces a staff incentive, 3 percent of any revenue collected in a quarter that exceeds the estimated target. It also adds the Managing Director of the Kenya Ports Authority as a member of the KRA Board, creating a direct institutional link between the country’s main customs gateway and the revenue authority.
Both laws were passed by the National Assembly in mid-October 2026 and have received presidential assent. The lower fuel tax is temporary and popular.
The deeper changes , new discretionary power for the Treasury Cabinet Secretary, a guaranteed funding floor for KRA, a performance-linked staff incentive, and closer ties between the ports and the tax agency , are structural.
These are the provisions that will continue to shape tax administration and the balance of power between Parliament and the executive long after the current fuel relief ends.