Tax Update
VAT Basics for Kenyan Businesses
Who should register for VAT, how it works, and common mistakes to avoid.
VAT is a consumption tax collected by registered businesses on behalf of KRA. Understanding when registration is required — and how input and output VAT interact — avoids the most common filing errors.
Key insights
- Businesses exceeding the statutory turnover threshold are required to register for VAT; others may register voluntarily.
- Output VAT (charged on sales) less input VAT (paid on qualifying purchases) determines what's remitted to KRA.
- Not all purchases qualify for input VAT recovery — some categories are specifically excluded.
Compliance tips
- File VAT returns on time even when there's nothing to declare — nil returns are still mandatory.
- Keep supplier invoices that meet eTIMS requirements; non-compliant invoices put input VAT claims at risk.
Need help with this in your business?
Talk to us about kra services & compliance and we'll scope what it takes for your situation.
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