The National Assembly has approved the Tax Laws Amendment Bill which seeks to extend the reduction of Value Added Tax on petroleum products from 16% to 8%.
The bill which contains amendments to VAT Act introduced by the Majority Leader Kimani Ichungw’a targets to extend the relief which was introduced in April this year to cushion consumers from rising global oil prices.
The bill also gave National Treasury Cabinet Secretary powers to extend the new tax rate by another three months which expires on October 15, 2026.
“That period is coming to an end and therefore we need to amend the same VAT Act to once again for another 90 days with the hope that the war in the Middle East will come to an end. If it would not come to an end, we would likely be on recess and therefore we also allow the cabinet secretary the latitude to legally extend that period for a further three months and then we can review that position as the situation pertains then,” said Ichung’wa.
The amendments which attracted bipartisan support passed the third reading on Wednesday and now awaits presidential assent and is expected to give consumers relief for the next six months.
The amendment to Section 5 of the VAT act will extend the 8% VAT on super petrol, kerosone and diesel if adopted.
“The geographical tension in the Middle East continue to exert pressure on the global oil prices. The committee observed that extending the reduced VAT is necessary to cushion Kenyan’s against rising fuel costs and their cascading effects on transportation, production costs and the general cost of living,” said Kimani Kuria, Chairman of the Finance and National Planning Committee.
A section of legislators however warned the government on the continued importation of fuel under the government-to-government agreement.
“Honourable Speaker i support the reduction of VAT from 16% to 8% but call on the government to bring back open tender system,” said Caroli Omondi, MP Suba North.
In the latest fuel review published by the Energy and Petroleum Regulatory Authority (EPRA) on October 14, fuel prices rose sharply even with the inclusion of the 8% VAT.
In the latest cycle effective October 15 to November 14, 2026, a litre of super petrol went up by Ksh 12.93, diesel by Ks 9.90 and kerosene by Ksh 28.49.
According to EPRA, the increase is attributed to the rising global oil prices which contributed to higher charged in the average landed cost of imported of imported fuels.
