# Kenya VAT Guide for 2026: Rates, Registration & Compliance

Canonical: https://trykintsugi.com/sales-tax-guides/africa/kenya
Published: June 17, 2026

Kenya's standard VAT is 16%. This guide explains registration, the Digital Service Tax and VAT on electronic services, and filing via iTax.

- **SaaS:** Taxable
- **Clothing:** Taxable
- **Groceries:** Partial
- **Digital Goods:** Taxable

## 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

## 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 |

## 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]. Registration steps are in the How to Register section.

## 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

- [1] [Kenya Revenue Authority — Value Added Tax (16% rate, KES 5 million threshold, monthly VAT3 filing, digital marketplace supply, input VAT)](https://www.kra.go.ke/individual/filing-paying/types-of-taxes/value-added-tax)

- [2] [Kenya Revenue Authority — iTax portal (PIN and VAT registration; eTIMS)](https://itax.kra.go.ke)

- [3] [Tax Appeals Tribunal — VAT appeals](https://new.kenyalaw.org/judgments/KETAT/)

Verified July 2026 against Kenya Revenue Authority guidance.

## Frequently asked questions

### What is the Kenya VAT rate in 2026?

16% on most goods and services, with 0% on exports and certain essentials and some exempt supplies [1].

### Do foreign digital sellers register for VAT in Kenya?

Yes. The KES 5 million threshold does not apply to non-resident digital suppliers — they must register regardless of turnover [1].

### Is SaaS taxable in Kenya?

Yes. SaaS and digital services supplied to Kenyan customers are taxable at 16% [1].

### What is the SEP tax in Kenya?

A 3% Significant Economic Presence tax on non-resident digital income that replaced the Digital Service Tax; it is separate from VAT and has no threshold [2].

### When are Kenyan VAT returns due?

Monthly through the KRA iTax portal, due by the 20th of the month following the period [1].

### What is the penalty for late Kenyan VAT?

The higher of 5% of the tax or KES 10,000 for late filing, plus 5% and 1% monthly interest for late payment [1].