By James Murimi - Reporter
Kenya, April 17, 2026 - In a rapid, coordinated response to surging global oil prices, President William Ruto on Friday signed into law a measure reducing Value Added Tax (VAT) on petroleum products to 8 per cent, sealing one of the fastest legislative turnarounds in recent years.
The Value Added Tax (Amendment) Bill, 2026, sailed through all stages in the National Assembly on Thursday before being presented for presidential assent at State House, Nairobi, barely hours later.
Clerk of the National Assembly Samuel Njoroge said the two-clause Bill was triggered by an urgent request from the National Treasury, warning of the economic strain posed by rising fuel costs.
“I have the instructions of the Speaker… to present to you copies of a short Bill that comprised of only two clauses, but very impactful,” Njoroge said, noting the proposal sought to amend the VAT Act to cushion Kenyans from escalating petroleum prices.
The Bill was introduced by Kilifi North MP and Deputy Majority Leader Owen Baya following a Treasury dispatch dated April 10, 2026, urging immediate legislative action.
Lawmakers compressed the entire process, First Reading, Second Reading, Committee of the Whole House and Third Reading—into a single sitting on April 16, underscoring the urgency of the matter.
At the heart of the amendment is Section 6 of the VAT Act, which allows the Treasury Cabinet Secretary to vary VAT within a capped threshold. While the standard VAT rate remains at 16 per cent, Parliament deemed the existing flexibility insufficient to address the current fuel price shock.
“Cognisant that the threshold may not adequately cushion Kenyans, the House amended the law to provide that VAT applicable to petroleum products, for a period of 90 days, shall be at 8 per cent,” Njoroge said.
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The tax cut takes effect from April 15, 2026, aligning with the date of the President’s request to Parliament, and is expected to offer immediate relief at the pump.
However, lawmakers signalled caution over the temporary nature of the intervention, linking the move to volatility in the global energy market, particularly tensions in the Middle East.
“The House is also cautious that should the situation persist beyond the 90 days, there may be need to extend the VAT rate further,” Njoroge said, adding that the law empowers the Cabinet Secretary to prolong the relief window if necessary.
The swift passage and assent of the Bill highlight growing pressure on the government to shield households and businesses from the ripple effects of rising fuel costs, which have historically driven up transport fares and commodity prices.
With the new law in force, attention now shifts how long the government can sustain the relief if global oil markets remain unstable.