What is the standard VAT rate in Kenya in 2025?

The standard Value Added Tax (VAT) rate in Kenya is 16%. This applies to most goods and services and is set by the VAT Act 2013 (Cap. 476 Laws of Kenya), administered by the Kenya Revenue Authority (KRA). The 16% rate has been in force since September 2013 when Kenya replaced the 16% sales tax regime with a full VAT system.

Is there a reduced VAT rate in Kenya?

Yes. Kenya applies an 8% reduced rate specifically to petroleum products — petrol, diesel, kerosene, and liquefied petroleum gas (LPG) supplied to domestic end users. This rate was introduced through the Finance Act 2023 to moderate the cost of fuel and cooking gas. All other commercial goods and services either fall under the 16% standard rate, the 0% zero rate, or are fully exempt.

What goods and services are zero-rated for VAT in Kenya?

Zero-rated supplies attract 0% VAT but the supplier can still reclaim input VAT, making zero-rating more beneficial than exemption. In Kenya, zero-rated items include: exports of goods and services, basic unprocessed food (maize grain, wheat flour, rice, bread, milk, cooking oil, sugar), water, medicines and medical equipment, books and educational materials, agricultural inputs (seeds, fertilisers, pesticides), and certain transport services. Zero-rating is listed in the Second Schedule of the VAT Act 2013.

What is the difference between zero-rated and exempt from VAT in Kenya?

Both result in no VAT charged to the buyer, but they differ for the business making the supply. A zero-rated business can reclaim the VAT it paid on its own purchases (input VAT), so it has no hidden VAT cost. An exempt business cannot reclaim input VAT, meaning the VAT it paid on supplies becomes a real cost embedded in the price. In Kenya, exempt supplies include financial services, insurance premiums, land transactions, educational institution tuition fees, healthcare services, and domestic passenger transport. Exempt supplies are listed in the First Schedule of the VAT Act 2013.

How do I calculate Kenya VAT at 16% on a net price?

Multiply the net (pre-tax) amount by 0.16 to get the VAT, then add it to the net to get the gross. Formula: Gross = Net x 1.16. Example: a service quoted at KSh 50,000 net has VAT of KSh 8,000 (50,000 x 0.16) and a gross total of KSh 58,000. The calculator does this automatically — just enter 50,000, select 16% Standard, and choose Add VAT mode.

How do I remove VAT from a VAT-inclusive price in Kenya?

Divide the gross (VAT-inclusive) amount by 1.16 to get the net, then subtract to find the VAT. Formula: Net = Gross / 1.16; VAT = Gross - Net. Example: an invoice total of KSh 58,000 contains net KSh 50,000 and VAT KSh 8,000. For the 8% reduced rate divide by 1.08 instead. Switch the calculator to "Remove VAT" mode and the tool handles the division for whichever rate band you select.

Kenya VAT Calculator 2025 — 16% Standard & 8% Petroleum Rate

Kenya introduced a modern Value Added Tax (VAT) system under the VAT Act 2013 (Cap. 476, Laws of Kenya), replacing the previous sales tax regime. The tax is administered by the Kenya Revenue Authority (KRA) and collected at every stage of the supply chain, with registered businesses reclaiming the VAT they pay on their own purchases (input VAT) and remitting only the net difference to KRA via the iTax portal.

This calculator handles the full current rate structure: the 16% standard rate that applies to most goods and services, the 8% reduced rate introduced for petroleum products and LPG by the Finance Act 2023, and the 0% zero rate for exports, basic food, water, medicines and educational materials. It works in both directions — add VAT to a net price, or strip VAT from a gross price — and shows the complete net / VAT amount / gross breakdown in Kenyan shillings (KSh) with copy buttons for each figure.

How it works

Add VAT mode (net to gross): you enter the price before tax. The calculator computes:

VAT amount = Net x (rate / 100)
Gross total = Net + VAT amount

Remove VAT mode (gross to net): you enter the VAT-inclusive price. The calculator computes:

Net = Gross / (1 + rate / 100)
VAT amount = Gross - Net

At the 16% standard rate the divisor is 1.16; at the 8% reduced rate it is 1.08. The formula is the standard reverse-VAT extraction used on Kenyan tax invoices and KRA ETR receipts. All arithmetic runs in JavaScript inside your browser — no figures are transmitted anywhere.

Worked example — standard 16% rate

A Kenyan IT consultancy quotes a client KSh 75,000 for software development services (net, excl. VAT). The consultancy is registered for VAT and must charge 16%:

Line	Amount
Net (excl. VAT)	KSh 75,000.00
VAT at 16%	KSh 12,000.00
Gross (incl. VAT)	KSh 87,000.00

The client pays KSh 87,000. The consultancy remits KSh 12,000 to KRA (after deducting its own input VAT on business purchases), keeping KSh 75,000 as its revenue.

Worked example — 8% petroleum reduced rate

A fuel distributor sells KSh 10,000 of diesel (VAT-inclusive price on the pump receipt). To find the split:

Line	Amount
Gross (incl. VAT)	KSh 10,000.00
VAT at 8% (= 10,000 / 1.08 x 0.08)	KSh 740.74
Net (excl. VAT)	KSh 9,259.26

Switch the calculator to Remove VAT, enter 10,000, select 8% Reduced, and the breakdown appears instantly.

Kenya VAT rate reference table

Rate	Category	Applies to
16%	Standard	Most goods and services — electronics, clothing, telecom, professional services, construction
8%	Reduced	Petroleum products (petrol, diesel, kerosene), LPG for domestic use
0%	Zero-rated	Exports, basic foodstuffs, water, medicines, educational materials, agricultural inputs
Exempt	Exempt	Financial services, insurance, land/buildings, school fees, healthcare, domestic transport

VAT registration is compulsory once annual taxable turnover exceeds KSh 5,000,000 (five million shillings). Businesses below that threshold may register voluntarily. Registered businesses must file VAT returns monthly via KRA iTax by the 20th of the following month, and issue KRA-compliant Electronic Tax Registers (ETR) receipts.

Every figure in this tool is calculated in your browser — no amounts or personal data are ever sent to a server.