William Ruto has signed into law the Value Added Tax (Amendment) Bill, 2026, in a move aimed at easing the rising cost of living triggered by global economic shocks.
Speaking at State House, Nairobi, the President said the new law provides a legal framework to shield Kenyans from the economic impact of escalating conflict in the Middle East, which has disrupted global fuel markets.
“I have today assented to the Value Added Tax (Amendment) Bill, 2026. We will do everything possible to cushion Kenyans from the economic shocks arising from the conflict in the Middle East,” Ruto said.
Under the new law, the government has reduced Value Added Tax (VAT) on fuel from 16 per cent to 8 per cent, effectively halving the tax burden on petroleum products. The President noted that the decision was informed by the direct effect fuel prices have on the broader economy.
“We have taken this urgent and necessary step because a surge in the cost of fuel has a ripple effect on consumer goods and services,” he stated.
The tax reduction will initially remain in force for 90 days, with provisions allowing the government to extend the measure depending on the global situation.
“While the reduction in VAT will be in operation for 90 days, we have inserted a provision which will enable us to extend the application of the law should the conflict in the Gulf continue to affect oil prices,” Ruto added.
The Head of State also commended the National Assembly for fast-tracking the legislation.
“I thank the National Assembly for their swift consideration and passage of the Bill in a record one day,” he said.
The move comes amid growing concerns over rising fuel costs and their impact on inflation, as the government seeks to stabilize the economy and protect households from further financial strain.
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