Ruto signs new Tax Law: What changes for fuel prices, sanitary ware and building costs

President William Ruto has signed the Tax Laws (Amendment) Bill, 2026, into law, extending tax relief on petroleum products and introducing changes to excise duty on construction materials in measures targeting household expenses and building costs.

The law retains the reduced Value Added Tax (VAT) rate of eight per cent on fuel, down from the standard 16 per cent, while revising the taxation of tiles, sanitary ware and certain glass products used in construction.

The Tax Laws (Amendment) Bill, National Assembly Bill No. 65 of 2026, was sponsored by Majority Leader Kimani Ichung’wah.

It was introduced in the National Assembly on October 8 and passed with amendments on October 14 before being forwarded to President Ruto for assent.

The Head of State signed it while signing other Bills on Friday, October 16, at State Lodge, Eldoret.

The law extends the reduced VAT rate on petroleum products that was initially introduced in April 2026 to cushion consumers against rising fuel prices linked to the crisis in the Middle East.

Under the measure, VAT on petrol, diesel and kerosene remains at eight per cent instead of reverting to 16 per cent after the previous relief period expired on October 14.

The provision is intended to operate for 90 days, with the Cabinet Secretary for the National Treasury empowered to extend it for a further 90 days if necessary.

The extension is aimed at limiting pressure on transport costs, which feed into the prices of essential goods and services across the economy.

The tax reduction, however, does not guarantee that pump prices will fall, as retail prices are also affected by international petroleum costs and other pricing components.

The new law also amends the Excise Duty Act in provisions targeting the cost of construction materials, including tiles and sanitary fixtures.

According to the National Assembly, the previous approach on the taxation of imported ceramic tiles based on weight had significantly increased costs after amendments passed in June 2026, despite tiles commonly being sold by square metre.

The amendment changes the basis used to determine excise duty on tiles from weight to size, aligning the tax treatment more closely with how the products are sold.

The law also reduces the specific excise duty rate on imported sanitary ware, including ceramic sinks, wash basins, baths, bidets, water closet pans, flushing cisterns and urinals, from Sh50 per kilogramme to Sh30 per kilogramme.

The legislation further revises the description of imported float glass and surface-ground or polished glass to address a provision that the parliamentary brief said had applied excise duty to goods originating from East African Community partner states, contrary to the regional customs protocol.

The amendment allows qualifying glass products imported from within the East African Community to enter without the excise duty covered by the provision.

According to the parliamentary brief, the changes to tiles, sanitary ware and glass are intended to lower construction costs for both government and private-sector projects, including Affordable Housing programmes.

The amendments are also intended to support construction, a sector that contributes to economic activity and employment.