NAIROBI, Kenya — President William Samoei Ruto has signed into law a tax measure halving Value Added Tax (VAT) on fuel from 16pc to 8pc, in an urgent bid to shield Kenyan households and businesses from rising global oil prices triggered by instability in the Middle East.
In a statement issued from State House Nairobi on Friday, the President said he had assented to the Value Added Tax (Amendment) Bill, 2026, formalising an intervention he first announced earlier this week during a tour of Kisii County.
The law takes immediate effect and will apply for 90 days, with a provision allowing extension should global conditions persist.
“We will do everything possible to cushion Kenyans from the economic shocks arising from the conflict in the Middle East,” Ruto said, linking the policy shift directly to volatility in global energy markets. He noted that rising fuel prices have a “ripple effect” across the economy, pushing up the cost of transport, food, and essential services.
The tax cut comes amid heightened tensions in the Gulf region, a critical hub for global oil supply, which has triggered upward pressure on international crude prices.
Kenya, a net importer of petroleum products, is particularly vulnerable to such external shocks, often passing increased costs to consumers through pump prices.
Parliament fast-tracked the legislation, with the National Assembly passing the Bill in a single day — an unusually swift process that underscores the urgency of the intervention.
The President thanked lawmakers for what he described as their “swift consideration,” although such expedited legislative action may raise questions among governance experts about the depth of parliamentary scrutiny.
Under the Value Added Tax (Amendment) Bill, 2026, the temporary reduction is designed as a short-term stabilisation tool.
However, the inclusion of an extension clause gives the Executive flexibility to prolong the tax relief without immediately returning to Parliament, a move that could spark debate over the balance of fiscal authority between the Legislature and the Executive.
