ComplyBora
Last reviewed 2026-11-04 Applies to: Finance Act 2026 position, checked November 2026
Short answer: the standard VAT rate is 16%. You must register once your taxable supplies reach KES 5 million a year, and you can register voluntarily below that.
How VAT works
A VAT-registered business charges VAT on taxable supplies, deducts the VAT it paid on business purchases (input tax) and pays the difference to KRA. Returns are filed monthly on iTax, due by the 20th of the following month. Some supplies are zero-rated (0%) or exempt.
Worked example
A registered business sells goods for KES 100,000 excluding VAT: VAT is KES 16,000 and the customer pays KES 116,000. If it paid KES 6,000 input VAT on purchases, it pays KES 10,000 to KRA.
Common mistakes
- Charging VAT on exempt supplies. KRA says a VAT invoice should be issued only for a taxable supply.
- Missing registration after crossing the threshold.
- A turnover tax taxpayer with VAT-able supplies of KES 5 million or more must also register for VAT.
Related guides
VAT Calculator Kenya (16%)Turnover Tax (TOT) in Kenya: Rate and Who PaysFinance Act 2026 in Kenya: What Changed and When
Official and source references
General information built on the official sources above. Confirm the current position with the issuing authority before acting.