VAT rates, and what is exempt or zero-rated
Value Added Tax Act; Kenya Revenue Authority · sources read 5 Oct 2026
The standard VAT rate is 16%. Zero-rated supplies, such as exports, ordinary bread, plain milk and LPG, are charged 0%, and exempt supplies, such as medical services, education and residential rent, carry no VAT at all. Premium petrol, illuminating kerosene and diesel were cut to 8% for 15 July to 14 October 2026 only; after that 16% applies again unless the Government gazettes an extension.
- Deadline
- Register for VAT within 30 days of reaching the KSh 5 million threshold
- Where
- VAT is charged at the till by VAT-registered sellers; businesses register and file VAT on the KRA iTax portal
Steps
- When you buy from a VAT-registered seller, ask for the tax invoice. The seller must give it at the time of the sale.
- Check the invoice is genuine by scanning its QR code or entering the invoice number in the invoice number checker on iTax.
- If your own business reaches KSh 5 million in taxable sales in 12 months, apply to KRA for VAT registration within 30 days.
Watch out
- Zero-rated and exempt are not the same. Zero-rated items are listed in the Second Schedule of the VAT Act and taxed at 0%; exempt items are in the First Schedule and are outside VAT.
- The Cabinet Secretary for Finance can raise or lower the rate by gazette notice, by up to 25% of the 16% rate. The lists of exempt and zero-rated items also change with Finance Acts.
- Local passenger transport, such as matatu and bus fares, is exempt, but not international air travel or a hired or chartered vehicle.
- Fuel is a temporary exception: premium petrol, illuminating kerosene and diesel are taxed at 8% from 15 July 2026 up to 14 October 2026. After that the 16% rate applies again unless a new order extends the cut.
Who this covers
- Businesses that sell taxable goods or services worth KSh 5 million or more in any 12 months must register and charge VAT
- Buyers: VAT is added to the price you pay a VAT-registered seller
Official sources (4)
- Learn about eTIMS (FAQ) kra.go.ke · read 2 Oct 2026
- Value Added Tax Act (Cap. 476), version of 1 July 2026 new.kenyalaw.org · read 5 Oct 2026
- Value Added Tax (Amendment of Rate of Tax) Order, 2026 (L.N. 128 of 2026) new.kenyalaw.org · read 5 Oct 2026
- iTax portal itax.kra.go.ke · read 2 Oct 2026