Cornered: Ruto caught between a rock and hard place over fuel VAT rollback

President William  Ruto cut value added tax (VAT) on fuel by three per cent .[PCS]

The government’s decision to cut value-added tax (VAT)  on fuel by three per cent is expected to have a negative ripple effect on the country’s revenues for both the current and the forthcoming financial year.

The reduction of VAT from 16 to 13 per cent as announced by the Energy and Petroleum Regulatory Authority (EPRA) on Tuesday will not only cut  Kenya Revenue Authority's (KRA) collections for this quarter but also eat into the exchequer’s 2026/27 projections.