How vat / sales tax works in Kenya
Kenyan VAT defaults to 16% on domestic supplies, with output tax charged, input tax credited, and monthly returns filed by the 20th.
Registration follows the KES 5 million turnover threshold with voluntary entry below, while exports and EPZ supplies zero-rate.
Financial, health, education, and agricultural supplies are largely exempt, and eTIMS e-invoicing validates every transaction.
Tax rates at a glance
- Standard VAT
- 16%
- Zero-rated supplies
- 0%
- Exempt supplies
- Exempt
- Registration line
- KES 5m
- Filing rhythm
- Monthly
- E-invoicing
- eTIMS
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
E-commerce sellersManufacturersSaaS foundersExpatsCross-border traders
Watch out for
- eTIMS validation gates credits: non-transmitted invoices undermine buyer claims regardless of the underlying supply.
- Exempt supplies block input recovery without a reduced band to blame, repricing mixed health and finance work.
- Digital-service collection pulls non-resident vendors into duties from qualifying B2C sales.
- Finance Bill cycles move thresholds and mechanics yearly, so prior-year parameters mislead systematically.
Frequently asked questions
What is the VAT rate in Kenya?
Kenya applies 16% standard VAT in 2026, with zero-rating for exports and exemptions for finance, health, and education.
How often are Kenyan VAT returns filed?
Monthly by the 20th, with eTIMS e-invoicing validating every transaction behind the return.
When must a Kenyan business register for VAT?
Past KES 5 million of turnover, with voluntary registration below. Digital sellers follow dedicated collection tracks.