How MPs saved Ruto in record one-hour to pass fuel levy cut Bill

President William Ruto on Friday assented to the Value Added Tax (Amendment) Bill, 2026, allowing the Treasury to cut VAT on petroleum products to 8 per cent.

This came after Parliament raced through legislation in a record one hour on Thursday, handing President Ruto a political lifeline by legally securing the slashing of value-added tax on fuel to 8 per cent even as scrutiny mounted on Government.

The new law amends Section 6 of the VAT Act to permit the Treasury Cabinet Secretary to vary VAT on petroleum products beyond the previous cap, in a bid to ease fuel costs amid the Middle East crisis.

Previously, the Act allowed the Treasury Cabinet Secretary to adjust VAT by up to 25 per cent of the standard rate of 16 per cent. However, the President said the 25 per cent cap was insufficient to cushion Kenyans from rising fuel prices.

The Amendment Bill was introduced in the National Assembly on Thursday, April 16, by Deputy Majority Leader Owen Baya.

In a record one hour, Members of Parliament debated and passed the Bill, effectively legalising the Treasury’s directive to cut VAT by 50 per cent.

The Bill tabled by Baya sailed through the third reading as the majority of members in the House adopted to pass it.

During debate, MP Baya moved to absolve the President Ruto administration from blame over the hiked prices.

“Kenya exists within the global financial ecosystem, and therefore the wars and disruptions that have been happening in the Middle East have greatly affected our country. What we have is not domestic policies that have driven up the cost of fuel, but rather international trade dynamics and geopolitics. It is therefore necessary for this House to take additional steps to enact this legislation to cushion Kenyans,” stated Baya.

“Having exhausted the provisions of Section 6 of the VAT Act, we are now left with the option of an amendment Bill,” he added.

But even as the lawmakers welcomed the downward review of VAT, they called on the government to institute more measures to reduce the cost of living and shield Kenyans from the shocks.

“We need to pass this Bill as soon as possible to cushion Kenyans against high fuel prices. But I also want to urge the government because I have heard Kenyans debating why oil is cheaper in Uganda and neighbouring countries compared to Kenya.

The reason is because of the taxes and levies we have imposed on the product, as we get them from the same source. We should implore the Government to look into other areas where we can reduce levies and taxes so that we make oil cheaper for Kenyans,” urged Kitui Central MP Makali Mulu.

Kabuchai MP Majimbo Kalasinga called for a reduction in transport fares by public service vehicles now that the cost of fuel would decrease.

“As I support this Bill, I am of the view that even the transport industry must heed this. 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 stated.

Central Imenti MP Moses Kirima, while supporting the reduction of VAT, called on the State to develop its already discovered oil to avoid future price hikes.

“My view is that, in addition to that, Kenya had discovered its own oil some time back, and oil is a necessary commodity. If we had developed our own oil and exhausted the resources we have, we would not be facing what we are facing now.

‘‘Why can’t we as Kenyans make sacrifices in one way or another and focus on developing our own oil resources? Petroleum has been discovered in Kenya, yet nobody has really spoken about it or what we are supposed to do,” he observed.

A section of lawmakers, however, questioned the three-month duration the Bill would remain in force.

Kitutu Masaba MP Clive Gisairo submitted: “It is this very House that increased the taxes, including the Sh7 increase in the Road Maintenance Levy Fund (RMLF), at a time when we had a downward oscillation.

Some of us rose in this House and warned that this would be a dangerous move, especially given the upward oscillation. I would like to request that, while this measure is a step in the right direction, it should not be temporary.”

Adding: “If we are going to have the VAT cut for 90 days and the oscillation goes downwards, what happens when it goes up? Will we be bringing such a Bill every now and then? We would also request that the Sh7 increment in the RMLF introduced in 2024 be withdrawn so that we can cushion Kenyans.”

Suba South MP Caroli Omondi called for a review of the Government-to-Government framework of oil importation.

“It is time to interrogate the G-to-G framework being used to import fuel in this country. I understand the term contract to mean that it is the suppliers who nominate the local company that uplifts the fuel.

‘‘Since the introduction of the G-to-G arrangement, one company has been controlling between 60 per cent and 70 per cent of the supply, yet it is a very small company that does not boast of high efficiency, better logistics in terms of depots, or adequate storage. Because of that, prices have not come down under the G-to-G,” he emphasised.