Kenya VAT Calculator 2025

Value Added Tax (VAT) is an indirect consumption tax charged on the supply of taxable goods and services in Kenya. It's collected at each stage of production and distribution but ultimately paid by the final consumer.

How VAT works in Kenya:

• Businesses charge VAT on sales (Output VAT)
• Businesses pay VAT on purchases (Input VAT)
• Net VAT = Output VAT - Input VAT is remitted to KRA
• Returns filed monthly by 20th via iTax portal

Source: KRA - Value Added Tax

The VAT rates in Kenya for 2025 are:

Withholding VAT: 2% of taxable supplies (charged by government entities and approved withholding VAT agents)

Source: KRA Official VAT Rates 2025

Mandatory VAT Registration:

• Turnover threshold: Businesses with annual taxable turnover exceeding KES 5,000,000 must register within 30 days
• Before starting business: If you expect to exceed KES 5M in the next 12 months
• Importers: Some businesses may need to register regardless of turnover

Voluntary VAT Registration:

Businesses below the threshold can voluntarily register for VAT if they wish to claim input VAT on purchases.

Registration Process:

1. Log in to iTax portal (itax.kra.go.ke)
2. Apply for VAT registration
3. Submit required documents
4. Receive VAT PIN certificate

Source: KRA Registration Requirements

Zero-rated supplies attract 0% VAT but businesses can still claim input VAT. Common zero-rated items include:

Important: Zero-rated is different from exempt. Zero-rated suppliers can claim input VAT, while exempt suppliers cannot.

Source: VAT Act 2013 - Second Schedule

Exempt supplies have no VAT charged and businesses cannot claim input VAT on related purchases:

• Financial services: Banking, lending, credit facilities
• Insurance services: Life, medical, general insurance
• Education: Tuition fees, examination fees (registered institutions)
• Healthcare: Medical services, hospital care
• Residential property: Rental of residential properties
• Transport: Passenger transport by road (14+ seat vehicles)
• Betting & lottery: Gaming and betting services

Note: Exempt businesses cannot claim input VAT, making some costs higher than for VAT-registered businesses.

Source: VAT Act 2013 - First Schedule (Exempt Supplies)

VAT Filing Deadlines:

• Monthly returns: Due on or before the 20th of the following month
• Example: January VAT return must be filed by February 20th
• Payment: Also due by 20th of the following month

How to File VAT Returns:

1. Log in to iTax portal
2. Navigate to Returns → File Returns → VAT
3. Select the tax period (month/year)
4. Enter sales (output VAT) and purchases (input VAT)
5. System calculates net VAT payable/refundable
6. Submit the return
7. Make payment via bank, M-Pesa, or iPay if VAT is due

⚠️ Late Filing Penalty: KES 10,000 or 5% of tax due (whichever is higher) for late filing. Late payment attracts 1% interest per month.

Source: iTax Portal

eTIMS (Electronic Tax Invoice Management System) is a digital system by KRA for real-time transmission of sales and purchase invoices.

Who Must Use eTIMS:

• All VAT-registered taxpayers (mandatory as of 2024)
• Non-VAT businesses above turnover threshold
• Businesses issuing tax invoices

eTIMS Benefits:

• ✅ Real-time invoice transmission to KRA
• ✅ Automatic VAT return pre-population
• ✅ Reduced compliance burden
• ✅ Digital record keeping
• ✅ Input VAT validation

eTIMS Devices:

• Desktop application (free download)
• eTIMS server (for ERP integration)
• Virtual Sales Control Unit (VSCU)

Download eTIMS: KRA eTIMS Portal

To Add VAT (16%) to a price:

To Remove VAT (16%) from total price:

💡 Quick Tip: Use our calculator above for instant accurate calculations, especially for large amounts or multiple items!

Withholding VAT is a mechanism where certain entities deduct a portion of VAT at source when making payments to suppliers.

Withholding VAT Rate: 2% of the taxable value (effective since November 2019)

Who Withholds VAT:

• Government ministries, departments, and agencies
• Public universities and state corporations
• County governments
• Appointed withholding VAT agents (large companies)

How It Works:

1. Supplier issues invoice with 16% VAT = KES 16,000 on KES 100,000 supply
2. Government entity withholds 2% = KES 2,000
3. Supplier receives KES 114,000 (instead of KES 116,000)
4. Supplier claims withheld KES 2,000 as credit when filing VAT return

Note: Withholding VAT certificates are issued via iTax and must be claimed in VAT returns.

Source: KRA Withholding VAT Guidelines

Official KRA Resources:

• 🌐
  KRA Website: kra.go.ke/value-added-tax

  Complete VAT information, rates, and guidelines

• 💻
  iTax Portal: itax.kra.go.ke

  File returns, make payments, check compliance

• 📱
  KRA Call Centre: 0711 099 999 / 0711 099 100

  Monday - Friday: 8:00 AM - 5:00 PM

• ✉️
  Email Support: callcentre@kra.go.ke

  For VAT queries and support

• 🏢
  eTIMS Support: kra.go.ke/etims

  Download eTIMS software and user guides

💡 Tip: Visit your nearest KRA Taxpayer Service Centre for in-person assistance with VAT registration and compliance.