State seeks to extend VAT relief on fuel to mid-December
The Kenyan government is proposing a bill to extend an 8% VAT relief on fuel products for 90 days. This measure aims to protect consumers from rising global oil prices caused by the escalating US-Iran conflict.
Why it matters
Fuel price stability is critical for managing inflation and cost-of-living pressures in net-importing nations like Kenya.
The State is seeking to extend the eight percent Value Added Tax (VAT) on diesel, petrol and kerosene from today to mid-December this year to cushion consumers from costly fuel amid escalation in the Middle East war.
This is through the State-sponsored Tax Laws (Amendment) Bill, 2026 that if approved will see the current VAT of eight percent extended by 90 days. The current rate was set to lapse today (October 14,2026), the day when the State will announce new pump prices for the month to November 14.
But a re-escalation of the US-Iran conflict last month sparked a rally in global prices of Brent crude, setting the stage for a spike in local prices unless the State intervenes in the form of the subsidy or extension of the eight percent VAT rate.
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