VAT rates in Kenya

Updated on July 4, 2022

Quick overview

Standard Rate Reduced Rate Other Rates
16% 8% Zero-rated (0%) and exempt

The local name for VAT in Kenya is Value-added tax (VAT).

There are basically 2 VAT rates in Kenya:

  • Standard VAT rate is 16%
  • Reduced VAT rate is 8%

Recent developments

Please go here to learn more about recent rate changes in Kenya.

The rate will rise to 16% on January 1, 2021. Standard VAT rates were 14 percent prior to that date.

Standard rate: 14%

All transactions in Kenya are subject to this rate, unless an exception is made (such as a reduced rate, the zero rate or an exemption, or a reason to treat the transaction as outside scope of VAT).

Reduced rate: 8%

The following are some examples of items and services subject to an 8.5% tax.

Fuel for the car’s engine (regular and premium gasoline)
Fuel for planes and helicopters
Natural gas and oil

Zero rate (0%)

Products and services that are exempt from state sales tax

Goods and services that are subject to tax when exported
Export Processing Zones rely on goods and services from suppliers.
Passengers on international flights are transported by air carriers.
Special Economic Zones are provided with goods and services.
A steady flow of liquefied petroleum gas (LPG) (Please note that this supply will be taxed at the usual rate beginning on July 1, 2021, rather than zero percent.)
Provisions for the Commonwealth of Massachusetts
Procuring on behalf of other nations
diplomats with supplies
Examples of goods and services that are exempt from sales tax

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A supply of products or services that are not subject to VAT and do not qualify for an input tax deduction is referred to as a “exempt supply”.

Produce from farms that hasn’t been processed
Compasses for determining one’s location
Transporting people and their belongings
Services in the field of finance
Access to healthcare
Agriculture, horticulture, and animal husbandry are all included in this category.
International air travel or the use of hired or chartered aircraft are excluded from the definition of passenger transport.
National park and national reserve entrance fees

Option to tax for exempt supplies. The option to tax exempt supplies is not available in Kenya.

Source EY

A global VAT/GST rate overview can be found here (note this is a work in progress).

This post was last updated on September 1, 2021.