President William Ruto has signed two tax laws that bring relief to Kenyans on fuel, building materials, and bathroom fittings. He put his signature on the Tax Laws (Amendment) Bill, 2026 and the Kenya Revenue Authority (Amendment) Bill, 2026 on Friday at Eldoret State Lodge in Uasin Gishu County.
The most important change is on fuel. The new law cuts Value Added Tax (VAT) on petroleum products from 16 per cent to 8 per cent. It is a 90-day relief, but the Cabinet Secretary for the National Treasury can extend it for another 90 days if the situation still calls for it. Many wananchi will feel this one in their pockets, especially matatu operators, boda boda riders, and families who depend on cooking gas and paraffin.
This is not a brand new idea. The government first reduced VAT on fuel back in April. That first 90-day period, plus the extension that came after it, ended on October 14. Parliament says it had to act again because the crisis in the Middle East, which has kept global oil prices jumpy, lasted longer than anyone expected. Lawmakers argue that without this relief, fuel prices could shoot up and push the cost of transport and basic goods even higher. The Energy and Petroleum Regulatory Authority (EPRA) will now have room to keep pump prices stable.
The law also touches the construction sector, and this will be welcome news for contractors and anyone building a home. Excise duty on tiles will now be charged by size, not weight. Many people did not like the weight-based system that came in June, because it made tiles more expensive even though they are normally sold per square metre. Excise duty on sanitary ware, such as sinks, wash basins, bathtubs, bidets, toilet pans, and urinals, has also come down from Sh50 to Sh30 per kilogramme. The government says these changes will lower building costs for both public projects and private developers, including affordable housing schemes.
The law also fixes a problem with imported float glass and other glass products from the East African Community. Those goods were being taxed in a way that went against the EAC Customs Protocol, and that has now been corrected.
On the tax collector's side, the Kenya Revenue Authority (Amendment) Act, 2026 is meant to make KRA stronger and more efficient. Under the new law, all KRA board members will be full members, and the automatic seats for ex-officio members are gone. The Managing Director of the Kenya Ports Authority has also been added to the board, so the two agencies can work more closely together. KRA will also get guaranteed funding equal to at least two per cent of the revenue it is expected to collect each financial year. To keep the tax agency focused, the law also gives it an incentive of three per cent of any revenue it collects above the target for a quarter.
Parliament's own brief says that better efficiency at KRA should mean more money collected without squeezing ordinary Kenyans further. In other words, the government is betting that smarter collection, not higher taxes, will keep the books balanced.
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