President William Ruto signed the Tax Laws (Amendment) Act, 2026 and the Kenya Revenue Authority (Amendment) Act, 2026 on 16 October 2026. The first keeps VAT on fuel at 8% for a further 90 days and changes excise duty on some building materials. The second changes KRA’s board and sets a minimum level of funding for the authority. Neither Act changes income tax or the standard 16% VAT rate.
Fuel: 8% VAT extended
- VAT on petrol, diesel and kerosene stays at 8%, instead of the standard 16%, for an initial 90 days. The reduced rate was first introduced in April 2026 and lapsed on 14 October.
- The Cabinet Secretary for the National Treasury can extend the 8% rate for a further 90 days by Gazette notice.
Building materials: excise duty changes
| Item | Before | Now |
|---|---|---|
| Tiles | Excise duty charged by weight | Ksh 400 per square metre |
| Ceramic sanitary ware, such as sinks | Ksh 50 per kg | Ksh 30 per kg |
| Float and flat glass from East African Community partner states | Excise treatment out of step with EAC customs rules | Aligned with the EAC Customs Protocol |
KRA: board and funding
- The managing director of the Kenya Ports Authority joins the KRA board, and the government officials who sat on the board ex officio become full members.
- KRA is to receive at least 2% of the revenue projected in the annual financial estimates.
- KRA also earns an incentive of 3% of any revenue it collects above the estimate for a quarter.
Who should take note
Fuel retailers, transporters and businesses with large fuel bills should plan for the 8% rate to run for 90 days, with a possible 90-day extension. Importers, distributors and contractors dealing in tiles, sanitary ware or glass should check their pricing and excise filings against the new rates.
Sources: Capital FM, Explainer: what Ruto’s new tax laws mean for motorists, builders and KRA, 16 October 2026 · Citizen Digital, Ruto assents to Tax, KRA Bills targeting fuel prices and revenue governance, 16 October 2026 · The Star, Ruto signs two tax laws on fuel VAT and construction costs, 16 October 2026 · KBC, MPs approve extension of 8% VAT on fuel for another 90 days, 15 October 2026.
This briefing is general information, not advice. Contact the partners about your situation.