By Andrew Kariuki

President William Ruto has assented to the Value Added Tax (Amendment) Bill, 2026, effectively reducing VAT on fuel from 16% to 8% in a move aimed at cushioning Kenyans from rising fuel costs.

In a statement shared after signing the Bill at State House, Nairobi, Ruto said the decision was driven by the need to mitigate economic pressures linked to the ongoing conflict in the Middle East.

“We will do everything possible to cushion Kenyans from the economic shocks arising from the conflict in the Middle East,” he said.

The President noted that the reduction, which will be in place for 90 days, is intended to ease the ripple effects of high fuel prices on the cost of goods and services.

“We have taken this urgent and necessary step because a surge in the cost of fuel has a ripple effect on consumer goods and services,” Ruto stated.

He added that the law includes a provision allowing the government to extend the tax reduction beyond the initial period if global oil market disruptions persist.

Ruto also commended the National Assembly for expediting the legislative process.

“I thank the National Assembly for their swift consideration and passage of the Bill in a record one day,” he said.

The tax adjustment comes amid sustained pressure on fuel prices, with the government seeking to stabilise the cost of living as global energy markets remain volatile.