William Ruto Signs Laws Cutting Fuel VAT and Reforming KRA

President William Ruto signed the Tax Laws Amendment Bill, 2026 and the Kenya Revenue Authority (Amendment) Bill, 2026 into law on October 16 at the Eldoret State Lodge. The legislation introduces immediate relief for consumers and structural changes to the nation's tax administration.

The Tax Laws Amendment Bill reduces value-added tax (VAT) on petrol, diesel, and paraffin from 16 percent to 8 percent for an initial 90-day period, with a possible 90-day extension. This measure is intended to protect households from fuel price volatility linked to the Middle East crisis. To lower construction costs, the law also reduces excise duties on ceramic sanitary ware and shifts the taxation of tiles from a weight-based system to a size-based fee of Sh400 per square metre.

Simultaneously, the Kenya Revenue Authority (Amendment) Bill overhauls the agency's governance by removing ex-officio members and adding the managing director of the Kenya Ports Authority to the board to improve coordination between port operations and revenue collection. The law guarantees the agency funding of at least two percent of its projected annual revenue and introduces a three percent incentive for exceeding quarterly collection targets.