Extension of Excise Duty Exemption

What Has Changed?

The Finance Act, 2026 has extended the Excise Duty exemption under the Second Schedule to the Excise Duty Act to include the National Intelligence Service (NIS).

The amendment adds the NIS to the list of institutions whose qualifying goods for official use may be exempt from Excise Duty where the applicable legal conditions are met.

Which Goods Are Covered?

The exemption covers qualifying goods for official use, including:

• Materials and supplies;
• Equipment and machinery; and
• Motor vehicles.

Why Does This Matter?

The amendment aligns the tax treatment of the NIS with that of other specified national security institutions, including the Kenya Defence Forces, Defence Forces Welfare Services and National Police Service.

This can reduce Excise Duty costs on qualifying official-use purchases and support government security operations.