VAT in Kenya: rate, registration, deadlines and penalties (2026)
Quick answer
VAT in Kenya is 16% on most goods and services. Registration is mandatory once annual taxable turnover reaches KES 8 million (raised from 5 million by the Finance Act 2025) and voluntary from KES 5 million. Returns are filed on iTax by the 20th of the following month, every VAT-registered business must invoice through eTIMS, and late filing costs the higher of KES 10,000 or 5% of the tax due.
VAT is the tax most Kenyan businesses meet first, because it rides on every sale. Get registration timing wrong and you either charge tax you cannot remit or miss a threshold KRA already sees through eTIMS data. This page keeps the current rate, thresholds, deadlines and penalties in one place, with the calculators and guides to act on them.
The change most businesses have not caught up with: the Finance Act 2025 moved the mandatory registration threshold to KES 8 million of taxable turnover. If you registered only because you crossed 5 million, you may now have the option to deregister; if you are approaching 8 million, plan for monthly filing and eTIMS invoicing before KRA writes to you first.
VAT at a glance (2026)
| Item | Rule |
|---|---|
| Standard rate | 16% on most goods and services |
| Zero-rated | 0%, mainly exports; input VAT is claimable |
| Exempt | No VAT charged; input VAT is NOT claimable |
| Mandatory registration | KES 8 million annual taxable turnover (Finance Act 2025) |
| Voluntary registration | Allowed from KES 5 million |
| Filing + payment | iTax, by the 20th of the following month, nil returns included |
| Late filing penalty | Higher of KES 10,000 or 5% of tax due |
| Late payment | 5% of unpaid tax plus 1% interest per month |
| Refund claims | Within 12 months (reduced from 24 by the Finance Act 2025) |
| E-invoicing | eTIMS mandatory for every VAT-registered business |
The KRA compliance calendar
Free tax calculators
Guides and definitions
Frequently asked questions
What is the VAT rate in Kenya in 2026?
When must a business register for VAT?
When are VAT returns due?
What is the penalty for filing VAT late?
Do VAT-registered businesses have to use eTIMS?
How long do I have to claim a VAT refund?
Sources and methodology
Figures on this page were verified in July 2026 against the VAT Act 2013 as amended, the Finance Act 2025 (registration threshold raised to KES 8 million, refund window reduced to 12 months), the Tax Procedures Act penalty provisions, and KRA iTax filing guidance. Last updated 2026-07-08.
Veira issues correct-VAT eTIMS invoices on every sale and keeps your monthly return reconciled automatically.