Kenya VAT Guide for 2026: Rates, Registration & Compliance
Kenya's standard VAT is 16%. This guide explains registration, the Significant Economic Presence tax and VAT on electronic services, and filing via iTax.
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Key Takeaways
Kenya charges 16% VAT on most goods and services, alongside a 0% zero rate and a list of exempt supplies [1]. Registration is compulsory once taxable turnover reaches or is expected to reach KES 5 million in 12 months, and non-resident suppliers to Kenya's digital marketplace must register regardless of the threshold [1]. VAT is filed monthly on the VAT3 return, due the 20th of the following month, and businesses deduct input VAT [1]. SaaS, digital services, and clothing are taxable at 16%, while many basic and unprocessed foods are zero-rated or exempt under the VAT Act schedules [1].
Taxability Snapshot
SaaS
Taxable
Clothing
Taxable
Groceries
Partial
Digital Goods
Taxable
Sales Tax Rates
Kenya's VAT standard rate is 16% on most goods and services, including digital supplies [1]. A 0% rate covers exports and certain essentials, and some supplies are exempt [1]. The tax authority is the Kenya Revenue Authority (KRA). Separately, a 3% Significant Economic Presence (SEP) tax — which replaced the Digital Service Tax — applies to non-resident digital income and is distinct from VAT [2].
Rate | Applies to |
|---|---|
Standard 16% | Most goods, services, digital supplies |
Zero 0% | Exports, certain essentials |
Exempt | Financial services, certain agricultural and medical supplies |
Kenya VAT Calculator
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Kenya · VATRates as of September 2026. Source: KRA: Value Added Tax (opens in a new tab).
Kenya · Standard rate
16%
VAT rate
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This is an estimate. Whether a sale is taxable, and at which rate, depends on what you sell, who you sell to and where it's supplied. If you intend to rely on these rates, please use the Kintsugi platform.
Registration & nexus threshold
Kenya uses a VAT registration threshold rather than US-style economic nexus. Registration is compulsory once taxable turnover reaches, or is expected to reach, KES 5 million over 12 months [1]. Non-resident suppliers of digital or internet marketplace services to Kenyan customers must register through the simplified system regardless of the threshold [1].
Filing frequency & deadlines
VAT returns are filed monthly through the KRA iTax portal, due by the 20th of the month following the period [1]. From 2026, the KRA's enhanced eTIMS system requires full digital invoicing, and un-invoiced online sales are non-deductible and flagged as undeclared income [2].
Exemptions
Exports and certain essentials are zero-rated, and financial services and some agricultural and medical supplies are exempt [1]. SaaS and digital services supplied to Kenyan customers are taxable at 16% [1].
Penalties
Late filing carries a penalty of the higher of 5% of the tax due or KES 10,000 [1]. Late payment adds a 5% penalty plus interest of 1% per month on the outstanding amount [1].
Sources
Verified July 2026 against Kenya Revenue Authority guidance.
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