The Tax Laws (Amendment) Bill, 2026
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
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Executive
Pending
Final
Pending
Temporary 8% VAT Rate Introduced for Fuel Products
Amends Section 5 of the Value Added Tax Act (Cap. 476) to set a reduced VAT rate of 8% on key petroleum products:
- Motor Spirit (gasoline) premium of tariff number 2710.12.20
- Illuminating Kerosene of tariff number 2710.19.22
- Gas Oil (automotive, light, amber for high-speed engines) of tariff number 2710.19.31
Fuel VAT Relief Capped at 90 Days with Extension Clause
Establishes a strict timeline for the lower VAT petroleum rates:
- The 8% rate remains in effect for an initial period of 90 days from the commencement of the Act.
- The Cabinet Secretary for Finance is empowered to extend this period for a further 90 days via a Gazette notice.
Excise Duty on Imported Tiles Recalculated by Size
Amends the First Schedule to the Excise Duty Act (Cap. 472) to shift the excise duty measure on imported ceramic flags, paving, hearth or wall tiles, unglazed ceramic mosaic cubes, and finishing ceramics of tariff 6907:
- Repeals the weight-based rate of 'KSh. 50 per kilogram'.
- Establishes a size-based rate of 5% of the excisable value or KSh. 300 per square meter, whichever is higher.
Bill No.
No. 65 of 2026
Gazette No.
Supplement No. 236
Sponsor
Kimani Ichung'wah
Background
The Tax Laws (Amendment) Bill, 2026 is a money bill proposed to amend the Value Added Tax Act (Cap. 476) and the Excise Duty Act (Cap. 472). The primary objectives are to cushion citizens from high global fuel prices through a temporary reduction in petroleum taxes and to reform the excise duty structure on imported ceramic tiles by shifting the tax assessment base from weight to dimensions.
Key Amendments
Value Added Tax Act (Cap. 476)
- Reduction of Petroleum VAT: Deletes subsection (2A) of Section 5 and substitutes it with a provision setting the VAT rate at eight percent (8%) of the taxable value for gasoline premium (tariff 2710.12.20), illuminating kerosene (tariff 2710.19.22), and gas oil (tariff 2710.19.31).
- Sunset Clause: Replaces subsection (2B) of Section 5 to limit the application of the 8% VAT rate to ninety (90) days from the commencement date. The Cabinet Secretary may extend this by notice in the Gazette for a single subsequent period of ninety (90) days.
Excise Duty Act (Cap. 472)
- Adjustment to Ceramic Tiles Duty: Amends the description under Part I of the First Schedule concerning imported ceramic flags, paving, hearth or wall tiles, unglazed ceramic mosaic cubes, and finishing ceramics of tariff 6907. It removes the rate of "5% of the excisable value or KSh. 50 per kilogram, whichever is higher" and replaces it with "5% of the excisable value or KSh. 300 per square meter, whichever is higher".
Transitional Provisions
- The 8% fuel tax relief operates as a temporary transitional measure lasting for 90 days upon publication, with a maximum potential framework of 180 days subject to executive extension.
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