Kenya Revenue Authority (KRA) says it has forgone Ksh 9.1 billion in tax revenue between April and May 2026 following the reduction of Value Added Tax (VAT) on fuel from 16pc to 8pc.
Speaking before the Senate Standing Committee on Energy, KRA Commissioner for Customs and Border Control Dr Lilian Nyawanda, said the tax relief intervention was implemented to mitigate the impact of global fuel price fluctuations on consumers and businesses.
Addressing concerns regarding the Premium Motor Spirit (PMS) consignment delivered by the vessel MT PALOMA, which is currently under investigation, Dr Nyawanda clarified that the consignment was re-shipped to other markets and did not enter the Kenyan market.
She further explained that the related customs entries have since been cancelled and that taxes amounting to Ksh 5.1 billion, paid by various Oil Marketing Companies (OMCs) through the principal importer, MT PALOMA, are scheduled for transfer to customs declarations relating to subsequent fuel consignments.
Dr Nyawanda noted that KRA continues to play a critical role in supporting the steady supply of petroleum products in the country through efficient customs administration and trade facilitation processes. She explained that the Authority facilitates the importation and customs clearance of petroleum products upon approval by the relevant
Partner Government Agencies (PGAs), which are mandated to undertake quality assurance and compliance checks.
“KRA supports the petroleum supply chain through the expeditious processing of import documentation, timely assessment and collection of duties, VAT, levies and other statutory charges, as well as the prompt release of cargo at petroleum depots in Mombasa and across the country,” said Dr Nyawanda.
The Commissioner emphasized that KRA’s role in the petroleum supply chain is limited to functions within its statutory mandate, including customs clearance, tax assessment, levy collection, transit control and trade facilitation.
