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Kenya withholding VAT

  • Oct 9, 2016 | Richard Asquith

Kenya withholding VAT

Kenya has reintroduced its withholding VAT, backdated it to 19 January 2016.

The measure, designed to prevent VAT evasion, was first introduced in 2003. It is effectively a VAT split payment regime, similar to the one recently deployed in Italy.  It allows for the Kenyan Revenue Authority to collect VAT directly from the customer in a VAT transaction, and effectively turns VAT into a Sales Tax-type of regime.

Specific organisations which are the recepiants  of taxable supplies must act as VAT agents for the government. These include: banks; public bodies; and exporters. When the agents are charged VAT, they must pay it directly to the tax authorities rather than the supplier. The agent will provide the supplier with a VAT certificate which the supplier can use as proof of VAT charged in their return.

VAT withholding VAT agents must declare the amounts withheld on a weekly basis to the tax authorities.

Kenya VAT news

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.