Time to rethink Kenya’s withholding VAT regime

Clients seek services at KRA headquarters in Nairobi on February 23, 2024. 

Photo credit: File | Wilfred Nyangaresi | Nation Media Group

Kenya introduced the withholding Value Added Tax (VAT) regime in October 2003 with the primary objective of addressing revenue leakages and enhancing VAT compliance.

Initially, the framework targeted government institutions in addition to other designated entities, mandating them to withhold 16 percent of VAT on taxable supplies and remit directly to the Kenya Revenue Authority (KRA).

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.