Ruto assents to VAT Bill allowing fuel tax cut to 8 per cent

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On Friday, April 17, President William Ruto assented to the Value Added Tax (Amendment) Bill, 2026, allowing the Treasury to cut VAT on petroleum products to 8 per cent.

The new law amends Section 6 of the VAT Act to permit the Treasury Cabinet Secretary to vary VAT on petroleum products beyond the previous cap, in a bid to ease fuel costs amid the Middle East crisis.

Previously, the Act allowed the Treasury CS to adjust VAT by up to 25 per cent of the standard rate of 16 per cent.

However, the President said the 25 per cent cap was insufficient to cushion Kenyans from rising fuel prices.

The Amendment Bill was introduced in the National Assembly on Thursday, April 16, by Deputy Majority Leader Owen Baya.

In a record one hour, Members of Parliament debated and passed the Bill, effectively legalising the Treasury’s directive to cut VAT by 50 per cent.

The revised VAT rate will apply for 90 days, with provisions allowing the Treasury to extend the period by a further 90 days if the fuel crisis persists.

Without the amendment, the latest fuel price changes would have been illegal.

Following the adjustment, a litre of super petrol will retail at Sh197.60, while diesel will cost Sh196.63.

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On Friday, April 17, President William Ruto assented to the Value Added Tax (Amendment) Bill, 2026, allowing the Treasury to cut VAT on petroleum products to 8 per cent.

The new law amends Section 6 of the VAT Act to permit the Treasury Cabinet Secretary to vary VAT on petroleum products beyond the previous cap, in a bid to ease fuel costs amid the Middle East crisis.

Previously, the Act allowed the Treasury CS to adjust VAT by up to 25 per cent of the standard rate of 16 per cent.
However, the President said the 25 per cent cap was insufficient to cushion Kenyans from rising fuel prices.

The Amendment Bill was introduced in the National Assembly on Thursday, April 16, by Deputy Majority Leader Owen Baya.
In a record one hour, Members of Parliament debated and passed the Bill, effectively legalising the Treasury’s directive to cut VAT by 50 per cent.

The revised VAT rate will apply for 90 days, with provisions allowing the Treasury to extend the period by a further 90 days if the fuel crisis persists.

Without the amendment, the latest fuel price changes would have been
illegal.
Following the adjustment, a litre of super petrol
will retail at Sh197.60,
while diesel will cost Sh196.63.

Follow The Standard
channel on WhatsApp