VAT is a tax on goods and services charged by registered taxpayers in Kenya. The main laws governing VAT include the VAT Act 2013 and Tax Procedures Act 2015. VAT returns must be filed monthly by the 20th of each month via the iTax system. Taxable supplies are subject to either a 16% standard rate, 8% rate for petroleum products, or 0% rate for exports and certain supplies. Registered businesses must maintain records and are subject to collection and enforcement measures if VAT obligations are not met.

1. VALUE ADDED TAX

2. Main Laws administered under VAT
i. VAT Amendment Act 2013
ii. Tax Procedures Act 2015
Ties: EACCMA, Excise Act 2015 and Finance Act.
Introduction

3. VAT is charged under Sec. 5 of the VAT Act 2013
VAT is a consumer tax on taxable goods & services
It is charged by registered taxpayers only.
Imposition of Tax

4. If a person has supplied or expects to supply taxable goods whose
value is Kshs. 5,000,000 and above within 12 months; one needs to
register for VAT.
Registration is done online https://itax.kra.go.ke/KRA-Portal/
VAT returns are submitted monthly via iTax on or before the 20th of
the following month.
After filing the VAT return online via iTax, you are required to
generate an E-slip which is used to physically pay the tax at the KRA
appointed Banks.
VAT Principles

5. This is the time at which one charges VAT. It is the earlier of;
a)Date of issuing of the invoice
b)Date of the deliveryof the goods or performance of the services
c)Receipt of part or full payment on account of the supply.
d)Date a certificate is issued by an Architect
Tax Point

6. VAT operates on an Input-Output Principle.
a)VAT on Purchases/Costs – Input Tax
b)VAT on Sales/Revenues – Output Tax
Therefore :
VAT Payable = Output Tax- Input Tax
If positive , tax due is payable on or before the 20th of the next
month.
If negative, it is a credit which is carried forward to the next month.
VAT OPERATIONS

7. Supplies are classified into two major categories:
1.Exempt: These goods/services do not attract VAT. All goods and
services not listed under 1st schedule – part1 ( exempt goods) and
part 2 (Exempt services) eg Live animals, unprocessed milk, edible
vegetables, raw groundnut etc.
2.Taxable: Vatable goods that are subject to VAT.
They include all other goods and services not listed in the 1st
schedule (Exempt)
Classification of Goods and Services

8. There are 3 types of tax rates;
1. 0%, - for Zero-rated supply. Goods listed in the 2nd schedule to
the VAT Act e.g. Exportation of goods/services, goods supplied to
EPZ, LPG, Privileged persons and Public bodies etc.
2. 8%-Petroleum oils obtained from bituminous, Motor spirits
(Diesel, Super0, Aviation spirit etc.
3. 16%- General rate for other goods and services.
VAT Rates

9. Withholding VAT

10. It is a method of collecting VAT that is charged by appointed agents only.
Example of Agents: Government Ministries, Agencies etc
It is Charged at the rate 2% of the value of taxable supplies- with effect
from 07/11/2019
e.g
Withholding VAT

11. Collection and enforcement measures are specified under Section
19 of the VAT Act & TPA Act, 2015.- Sec.32-46.
Tax is due and payable at the time of supply.
Payment and filing of returns is not later than 20th of the next
month (after the Tax period) . All this is done on iTax platform.
Interest on unpaid tax is 1% per month.
One is required to maintain records for 5 years
Collection and Enforcement

12. CONTACT US