The rate
The standard rate in Kenya is 16%. Some goods and services carry reduced or zero rates and others are exempt. The difference matters: zero-rated sales still let you reclaim the tax on your purchases, exempt sales do not.
Who must register
Registration is compulsory once taxable supplies reach KSh 5 million in any 12 months; below that you may register voluntarily.
How to register
VAT is an obligation added to your existing KRA PIN on iTax, not a separate number. Apply within 30 days of becoming liable (VAT Act, section 34(1)). Sales of capital assets and the sale of the business itself do not count towards the threshold. You can register voluntarily below it if you make taxable supplies, have a fixed place of business and are up to date with your other taxes. If you do not apply, KRA can register you itself, backdated to the first tax period after you should have applied.
KRA's April 2026 service charter lists the documents for adding VAT: the CR12 and IDs of directors (or your own ID), tax compliance certificates for all directors, work or investor permits for foreign directors, your physical address with a utility meter number and office rent agreement, a verified phone number and email, your website if you trade online, and contracts or sample invoices. Approval takes up to five working days, at no cost.
Once registered, display the VAT registration certificate prominently at your main place of business and a copy at every branch (section 35). Tell KRA within 21 days if your name, address or type of business changes, and onboard on eTIMS before you issue your first VAT invoice.
Filing and paying
Registered and filed with Kenya Revenue Authority (KRA).
Monthly VAT returns and payment are due by the 20th of the following month, filed on iTax. VAT-registered sellers must issue invoices through eTIMS.
Penalties for getting it wrong
A late VAT return costs KSh 10,000 or 5% of the tax due, whichever is higher, plus interest at 1% a month on unpaid tax.