VAT calculator (Kenya)
Add or remove Kenya’s 16% VAT in one step: KES 1,000 plus VAT is KES 1,160, and a VAT-inclusive KES 1,160 holds KES 160 of VAT. Zero-rated items at 0% can go on the same bill.
Updated:
With VAT
KES 1,160
VAT
KES 160
Without VAT
KES 1,000
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How to calculate VAT in Kenya
- Add VAT: VAT = price before VAT × 16%; price with VAT = price × 1.16.
- Remove VAT: price before VAT = price with VAT ÷ 1.16; VAT = the difference, or the price × 16 ÷ 116.
- The calculator works in whole shillings, rounding half up. When VAT is taken out of a price, the price before VAT and the VAT always add up to the price.
A bill of KES 1,000 including VAT: 1,000 ÷ 1.16 = 862.07 → KES 862 before VAT VAT: 1,000 − 862 = KES 138
16%, 0% and exempt
| Treatment | What it means |
|---|---|
| 16% | General rate: every taxable good and service that is not zero-rated. |
| 0% | Zero rate: the supplies listed in the Second Schedule to the VAT Act, 2013. |
| Exempt | The supplies in the First Schedule. They are not taxable supplies: no VAT is charged, and the VAT paid on what went into them cannot be claimed back. |
The 8% rate on petroleum products is gone: the Finance Act, 2023 deleted it from 1 July 2023. Whether an item is at 16%, zero-rated or exempt depends on the Schedules; ask KRA or your accountant when unsure.
Zero-rated and 16% items on one bill
Press Add an item at another rate and give each line its rate. VAT is worked out per rate and added up.
KES 3,000 of zero-rated goods + KES 2,000 of goods at 16%, before VAT: 3,000 × 0% = KES 0 2,000 × 16% = KES 320 VAT KES 320, bill KES 5,320
Withholding VAT: when a buyer pays you less
Buyers that KRA has appointed as withholding VAT agents keep back 2% of the value of a taxable supply and pay it to KRA. They pay you the rest, including the remaining 14% VAT, and KRA issues you a withholding VAT certificate on iTax. You still file your VAT return, and the amount withheld counts as a credit against the VAT you owe. Nothing is withheld on exempt or zero-rated supplies, or from sellers who are not VAT-registered.
An invoice of KES 100,000 + 16% VAT = KES 116,000, paid by a withholding VAT agent: Withheld for KRA: 100,000 × 2% = KES 2,000 Paid to you: 100,000 + 14,000 = KES 114,000 In your return: VAT of KES 16,000, with KES 2,000 as a withholding credit
Who registers, and what changed in 2026
- You must register for VAT when your taxable sales are, or will be, KES 5 million or more in a year. Below that, KRA may allow voluntary registration.
- VAT returns and payment are due by the 20th of the following month. VAT-registered sellers issue their tax invoices through eTIMS.
- The Finance Act 2026, most of it in force from 1 July 2026, left the 16% rate as it was. Among its VAT changes, KRA lists that fees payment service providers charge for digital payment services are not exempt from VAT, and that an invoice showing VAT should only be issued for a taxable supply.
VAT, credit sales and bad debts
Write a sale on credit at what the customer will pay, VAT included. A VAT-registered seller who sold on credit and was never paid may claim a VAT refund on the bad debt, under the conditions the law sets; the Finance Act 2026 changed the period for that claim from two years to three, and KRA asks for records and evidence. A credit book that dates every sale, payment and reminder is that record, and collecting early is better still: how to get paid faster.
Baki Fast is a credit book, not invoicing software: it does not issue eTIMS tax invoices, so keep issuing those as usual.
Sources
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This page is general information, not legal, tax or financial advice. Rules differ by country and change over time; check with an accountant or a lawyer before you decide.
Questions
What is the VAT formula in Kenya?
VAT = price before VAT × 16%. From a VAT-inclusive price, VAT = price × 16 ÷ 116: KES 5,800 × 16 ÷ 116 = KES 800, and the price before VAT is KES 5,000.
How is withholding VAT calculated?
It is 2% of the value of the taxable supply before VAT. On an invoice of KES 100,000 + VAT, the agent withholds KES 2,000 for KRA and pays you KES 114,000.
Did VAT change in Kenya in 2026?
Not the rate: it is still 16%. The Finance Act 2026, mostly in force from 1 July 2026, changed other VAT rules, such as VAT on digital payment fees and the period for bad-debt refunds.