Kenya's 8% fuel VAT rate due to expire 14 October; Bill would extend it by 90 days

Kenya's reduced 8% rate of value-added tax (VAT) on petrol, diesel and kerosene was due to expire on 14 October, and a Bill before the National Assembly would extend it by 90 days to mid-December, Business Daily reported on 13 October 2026. The paper said the State will likely extend the rate when it announces new pump prices, before Parliament passes the Bill to regularise the extension.

The Tax Laws (Amendment) Bill, 2026 is sponsored by Majority Leader Kimani Ichung'wah, the Kenyan news site Eastleigh Voice reported on 14 October. Business Daily said the measure is meant to keep cushioning consumers from rising global fuel prices. The Star reported on 13 October that the Bill would extend the application period of the 8% rate by 90 days from 15 October 2026.

Business Daily said new pump prices for the month to 14 November are due on 14 October. The Energy and Petroleum Regulatory Authority (EPRA) left Nairobi maximum pump prices unchanged for the period from 15 September to 14 October: KSh 214.03 a litre for super petrol and KSh 217.86 for diesel, The Star reported on 14 September. Business Daily said those prices are valid until midnight on 14 October. At the Central Bank of Kenya's rate of KSh 129.94 to the US dollar on 8 October and Xinhua's published market rate of 673.13 yuan per US$100 on 12 October, they come to about 11.1 yuan and 11.3 yuan a litre.

On 12 October the National Assembly approved a motion cutting the publication period for the Bill from 14 days to 10, the Kenyan broadcaster Capital FM reported. Ichung'wah moved it under Standing Order 120 and said the aim was to finish the tax law "before the end of next week". The Bill is National Assembly Bill No. 65 of 2026.

Capital FM said the shorter publication period does not constitute approval of the Bill's tax measures, and that the National Assembly's Finance and National Planning Committee has invited the public and stakeholders to submit comments. The Kenyan news site Kenyans.co.ke reported on 9 October that a notice from the National Assembly Clerk, dated 9 October, set a deadline of 5pm on 13 October for submissions, and that the committee would review them before reporting to the House.

The same Bill would change how excise duty on tiles is calculated, from weight to size, Capital FM reported.

The government forwent KSh 9.1 billion in April and May, an average of about KSh 4.5 billion a month, the Kenya Revenue Authority (KRA) said, according to Business Daily. Extending the 8% rate to December could cost upwards of KSh 36 billion in VAT collections, the paper reported. Eastleigh Voice also put the possible loss at more than KSh 36 billion. At the same rates, KSh 9.1 billion is about 470 million yuan, KSh 4.5 billion about 230 million yuan and KSh 36 billion about 1.86 billion yuan.

Brent crude has traded between US$101.21 and US$106.65 a barrel since the start of September, Business Daily reported, after a re-escalation of the US–Iran conflict in September sparked a rally in global prices.

Energy Cabinet Secretary Opiyo Wandayi said in a statement on 13 October that fuel stocks were adequate and that cargoes were arriving and being offloaded on schedule, The Star reported. The landed cost of super petrol at the port of Mombasa rose to US$1,385 a tonne in September from about US$1,199 in August, and diesel stood at US$1,313 a tonne in September, according to the statement. Wandayi said the global oil crisis would put further pressure on pump prices in the coming weeks.