NAIROBI, Kenya Apr 16 – The National Assembly has approved the Value Added Tax (Amendment) Bill, 2026, lowering VAT on petroleum products from 16 percent to 8 percent for a period of three months, in a move lawmakers say is aimed at cushioning Kenyans against rising fuel prices.
Finance Committee Chairperson Kuria Kimani, while seconding the motion, said Parliament was responding to what he described as a national crisis affecting households and businesses.
“As Kenyans are aware, we are facing a crisis, and this House is rising to the occasion to address fuel prices. That is why we resolve, as a House this afternoon, to reduce VAT on fuel from 16% to 8%, and to reduce the publication time of this Bill accordingly,” the Molo MP said.
MPs across the House backed the Bill, but used the debate to call for wider reforms in the petroleum sector and related levies.
Kitui Central MP and Budget and Appropriations Committee ranking member Makali Mulu urged the government to consider additional tax reductions, noting that regional price differences are largely driven by taxation.
“We need to pass this Bill as soon as possible to cushion Kenyans against high fuel prices,” Mulu said. “The reason is because of the taxes and levies we have imposed on the product, as we get them from the same source.”
He further challenged policymakers to review multiple charges applied to fuel, saying Kenya should align its pricing more closely with neighbouring markets.
Kabuchai MP Majimbo Kalasinga supported the Bill but urged transport operators to reflect the tax cut in fares, warning against delayed relief for consumers.
“If fuel prices have been reduced, they must also reduce fares instantly. It is not fair that fuel prices have been reduced, yet the transport industry has continuously increased costs,” he said.
Suba North MP Caroli Omondi questioned the government-to-government fuel import framework, calling for scrutiny of its structure and market dominance.
He argued that the arrangement appears to concentrate supply in the hands of a single intermediary, raising concerns about efficiency and competitiveness in the sector.
Kitutu Masaba MP Clive Gisario welcomed the tax reduction but questioned its temporary nature, warning that short-term measures may not provide lasting relief.
“If we are going to have it for 90 days and the oscillation goes downwards, what happens when it goes up?” he posed. He also called for the reversal of the Sh7 Road Maintenance Levy introduced in 2024, saying it continues to contribute to high fuel costs.
Lawmakers noted that previous tax increases, including levies introduced during earlier fiscal adjustments, have contributed to sustained fuel price pressures despite government interventions such as the government-to-government import framework.