Ruto Signs Tax Relief Law Reducing Fuel VAT by Half for Three Months

President Ruto has signed a new law reducing the Value Added Tax (VAT) on fuel by 50 percent for three months, aiming to offer immediate relief to motorists and businesses. This comes as the Kenya National Chamber of Commerce and Industry warns of significant economic strain, particularly within the transport sector, due to persistently high fuel costs. The Central Bank of Kenya forecasts inflation to reach 6.2 percent in July, driven by elevated fuel costs and a prolonged Middle East conflict impacting global oil supply chains. Meanwhile, the IMF has reduced Kenya's projected economic growth for 2026 from 4.9% to 4.5%, primarily driven by concerns over rising inflation and global economic uncertainties. Kenya has also formally requested financial assistance from the World Bank to mitigate economic fallout from the Iran war, particularly concerning energy imports and rising inflation.