VAT Calculator Kenya 2026

What VAT is

Value Added Tax (VAT) is a tax on the supply of goods and services. A VAT-registered business charges VAT on its sales (output VAT), pays VAT on its purchases (input VAT) and sends the difference to KRA. The tax is ultimately borne by the final consumer, because each business in the chain recovers the VAT it paid on its own costs.

The three kinds of supply

How VAT treats a sale depends on its category:

• Standard-rated supplies carry VAT at the standard rate, currently 16%. Most goods and services fall here.
• Zero-rated supplies carry VAT at 0%, but the seller can still reclaim the input VAT on its costs. Exports and certain basic goods are the usual examples.
• Exempt supplies carry no VAT, and the seller cannot reclaim the input VAT on costs linked to those sales. Some financial and educational services and unprocessed agricultural products are examples.

The difference matters. A zero-rated seller gets back the VAT it paid, while an exempt seller bears it as a cost. The calculator shows which treatment you chose.

Adding and removing VAT

Two simple calculations cover most everyday needs:

• Add VAT to a price that excludes it: VAT = price × rate, and the total is price + VAT.
• Remove VAT from a price that includes it: price excluding VAT = total ÷ (1 + rate), and VAT = total − that price.

The most common mistake is removing VAT by taking 16% of the total. With a 16% rate, the VAT in a KES 1,160 price is KES 160, which is 16% of KES 1,000, not 16% of KES 1,160 (which would be KES 185.60).

A worked example

Adding VAT to KES 1,000 gives VAT of KES 160.00 and a total of KES 1,160.00. Removing VAT from KES 1,160 gives a net price of KES 1,000.00.

Invoices and eTIMS

A VAT invoice should show the supplier's name and PIN, the customer's details where required, the description, the amount before VAT, the VAT charged and the total. VAT-registered businesses are expected to issue invoices through the eTIMS system. Without a valid invoice, a buyer may not be able to claim the input VAT.

Who must register

A business must register for VAT when its taxable supplies reach the registration threshold, currently KES 5,000,000 a year, or when it expects to. Use the VAT registration checker to test your sales. Some businesses register voluntarily because they want to reclaim input VAT. Once registered, you file a VAT return every month and pay by the 20th of the following month.

VAT on imports and on rent

Imported goods carry VAT at the border, collected by customs, which the importer can usually claim as input VAT. Commercial rent is VAT-able while residential rent is exempt. The rental income calculator handles VAT on commercial rent.

About the rate

The rate is held as an editable setting and updated if the law changes. The result is an estimate for information only. Check the VAT status of unusual goods and services in the VAT Act or with KRA.

Common invoice problems

Frequent invoice errors include charging VAT on exempt items, failing to show the supplier's PIN, using the wrong rate and writing a total without showing the VAT separately. A buyer who receives such an invoice might not be able to claim the input VAT. Check each invoice for the supplier's name and PIN, the date, the description, the VAT amount and the total. If you spot a mistake, ask for a corrected invoice or a credit note rather than adjusting your own books.

When you set prices, decide whether you will quote them with or without VAT and say so clearly on quotes and menus. Customers who are not VAT-registered care about the total, while business customers care about the VAT amount, so a consistent format on your invoices avoids disputes.

Guides, tools and templates for this topic

Read next: VAT for small businesses in Kenya: when to register and what to charge, How to file a VAT return on iTax, step by step, How to price your products and services: markup, margin and break-even

Related calculators: VAT Return Calculator, VAT Registration Threshold Checker, Withholding VAT Calculator

Excel templates: Pricing and markup calculator, Customer invoices and aged receivables tracker, Quotation with VAT

More in the blog and the template shop, or ask for a custom template.