Reduced VAT / GST rate

0

Standard VAT / GST rate

16 ^[1][2][3]

High VAT / GST rate

Not applicable 

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[1]   In principle, VAT in Kenya is charged at a standard rate of 16% on the supply of taxable goods and services in Kenya, and on the importation of taxable goods and services into Kenya. In certain cases, it is also possible that VAT-relevant transactions are zero-rated or exempt from VAT. 

[2] By way of a general update, on 11 December 2024, the President of Kenya assented into law the Tax Laws (Amendment) Bill, 2024 (the Tax Laws Amendment Act) which amended the Value Added Tax, 2013 (the VAT Act) with effect from 27 December 2024. Some of the notable changes include: (a) the time of supply for exported goods is now determined by considering the time when the registered person has obtained a certificate of export or such other equivalent Customs documentation, (b) the Tax Laws Amendment Act has deleted the input VAT apportionment rules and going forward, persons will be allowed to claim input VAT to the extent that it is incurred to generate taxable supplies, and (c) transfer of business as a going concern is now exempt from VAT.

[3] The Finance Bill, 2025 (the Bill) was gazetted on 6 May 2025, has since been published, and is expected to come into effect in July 2025.The Bill proposes to amend the VAT Act, 2013 by: (a) requiring VAT to be accounted for where exempt or zero-rated supplies are misapplied; (b) shortening the VAT refund claim period; and (c) allowing offsets for VAT on bad debts with approval. It also proposes to reclassify certain goods as exempt or standard rated, affecting sectors such as pharmaceuticals, renewable energy, transport, and manufacturing.