The Kenya Revenue Authority (KRA) has forgone KSh 9.1 billion in tax revenue between April and May 2026 following the government’s decision to reduce Value Added Tax (VAT) on fuel from 16 per cent to 8 per cent.
Speaking before the Senate Standing Committee on Energy, KRA Commissioner for Customs and Border Control, Dr. Lilian Nyawanda, said the tax relief measure was introduced to shield consumers and businesses from the effects of rising global fuel prices.
Dr. Nyawanda also addressed concerns surrounding a Premium Motor Spirit (PMS) consignment delivered by the vessel MT PALOMA, which is currently under investigation.
She clarified that the fuel shipment was re-exported to other markets and never entered the Kenyan market.
According to the Commissioner, customs entries associated with the consignment have been cancelled, while taxes amounting to Sh5.1 billion that had been paid by various Oil Marketing Companies (OMCs) through the principal importer will be transferred to customs declarations for subsequent fuel consignments.
She noted that KRA continues to play a key role in ensuring a steady supply of petroleum products through efficient customs administration and trade facilitation.
The Authority facilitates the importation and clearance of fuel products once they have received approval from relevant Partner Government Agencies (PGAs), which are responsible for quality assurance and compliance checks.
“KRA supports the petroleum supply chain through the expeditious processing of import documentation, timely assessment and collection of duties, VAT, levies and other statutory charges, as well as the prompt release of cargo at petroleum depots in Mombasa and across the country,” said Dr. Nyawanda.
She emphasized that KRA’s mandate within the petroleum supply chain is limited to customs clearance, tax assessment, levy collection, transit control and trade facilitation.
The Authority reaffirmed its commitment to facilitating legitimate trade, enforcing compliance with customs and tax laws, and supporting government interventions aimed at protecting the country’s economic interests while maintaining an efficient and secure petroleum supply chain.
Email your news TIPS to Editor@Kahawatungu.com — this is our only official communication channel
