Section 5

Charge to tax 

(1) A tax, to be known as value added tax, shall be charged in accordance with the provisions of this Act on –

• (a) a taxable supply made by a registered person in Kenya;
• (b) the importation of taxable goods; and
• (c) a supply of imported taxable services.

(2) The rate of tax shall be –

• (a) in the case of a zero-rated supply, zero percent; or 

• (aa) in the case of goods listed in section B of Part I of the First Schedule, eight percent of the taxable value, effective from the date of assent: (Finance Act, 2018 Effective 1st July 2018  ) Deleted by (Finance Act 2023 wef 1st-July-2023 S30)
• Provided that— 
• (i) the taxable value in respect of these goods shall exclude excise duty, fees and other charges; and 
• (ii) despite section 1 of the Finance Act, 2018, this paragraph comes into effect upon enactment of the Supplementary Appropriation (No.2)Act, 2018.Deleted by(TaxLAA-No1-2020 wef-15May2020 proviso) 
• (ab) in the case of the supply of liquefied petroleum gas including propane, eight percent;  (Finance Act 2022-wef-01-July-2022)Deleted by (Finance Act 2023 wef 1st-July-2023 S30)
• (b) in any other case, sixteen  fourteen*  sixteen** percent of the taxable value of the taxable supply, the value of imported taxable goods or the value of a supply of imported taxable services.  LN35-wef-1st April, 2020*   .LN206-wef -1st January 2021**

(3) Tax on a taxable supply shall be a liability of the registered person making the supply and, subject to the provisions of this Act relating to accounting and payment, shall become due at the time of the supply.

(4) The amount of tax payable on a taxable supply, if any, shall be recoverable by the registered person from the receiver of the supply, in addition to the consideration.

(5) Tax on the importation of taxable goods shall be charged as if it were duty of customs and shall become due and payable by the importer at the time of importation.

Finance Act, 2019 Effective 7th November 2019 
(6) Tax on the supply of imported taxable services shall be a liability of the registered person any person receiving the supply and, subject to the provisions of this Act relating to accounting and payment, shall become due at the time of the supply.

(7)* The provisions of subsection (1) shall be applicable to supplies made over the internet or an electronic network or** through a digital marketplace. Finance Act, 2019 Effective 7th November 2019*  (Finance Act 2021- wef-01July2021)**

Finance Act, 2019 Effective 7th November 2019 
(8) The Cabinet Secretary shall make regulations to provide the mechanisms for implementing the provisions of subsection (7).


 (9) For the purpose of this section, 

“digital marketplace” means a platform that enables the direct interaction between buyers and sellers of goods and services through electronic means. Finance Act, 2019 Effective 7th November 2019 (Finance Act 2021- wef-01July2021)

(9*) For the purposes of this section, 

“digital marketplace” means an online platform which enables users to sell or provide services, goods or other property**  sell goods or provide services** to other users.  (Finance Act 2021- wef-01July2021*) (Finance Act 2022-wef-01-July-2022**)

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