Net VAT due to KRA: output VAT on sales less input VAT on purchases.
VAT payable to KRA
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Output VAT (sales)
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Input VAT (purchases)
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You are a collector, not really a payer
VAT feels like a tax on your business, but mechanically you are an unpaid collector for the Kenya Revenue Authority. You charge VAT on what you sell, you pay VAT on what you buy, and at the end of each period you settle the difference. The VAT you charge customers is called output VAT. The VAT you pay suppliers is input VAT. What lands on your VAT return is output VAT less input VAT, and that net figure is what this tool computes. Understanding it this way stops you treating output VAT as your money, which is the root of most VAT cash crunches.
This calculator is aimed at the registered trader preparing a return and wanting a quick sense of the bill before logging into iTax. Feed it your taxable sales and taxable purchases for the period, both stated before VAT, and it applies the rate this calculator uses to each side and nets them off.
The monthly cycle and how the numbers net off
VAT in Kenya runs on a monthly return, typically due by the twentieth of the following month, with the standard rate applied at 16 percent on most goods and services. The calculation is a subtraction:
- Output VAT is 16 percent of your taxable sales for the period.
- Input VAT is 16 percent of your taxable purchases, but only purchases that genuinely relate to your taxable business and are backed by valid tax invoices.
- VAT payable is output VAT minus input VAT.
Confirm the standard rate and the filing deadline with the KRA, because both the rate and the boundaries of what is standard, zero-rated, or exempt have moved across recent Finance Acts. The structure of output minus input, though, is stable and is the part worth committing to memory.
A month with KES 1.2 million in sales
Take a trader with KES 1.2 million of taxable sales and KES 750,000 of taxable purchases in the month, both figures net of VAT. Using the rate this calculator applies, the return resolves like this.
| Item | Amount |
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The chart in the results panel shows output VAT as the full bar, input VAT as the credit that offsets it, and the remainder as the amount you actually remit to KRA.
When input VAT is bigger than output VAT
Some months flip the other way. If you stocked up heavily, bought equipment, or had slow sales, your input VAT can exceed your output VAT. The result is not a refund cheque in the post; it is a VAT credit that carries forward to offset what you owe on your next return. Say in a quiet month you make KES 400,000 of sales and KES 700,000 of purchases. Output VAT is KES 64,000, input VAT is KES 96,000, so input is higher than output by KES 32,000, and that KES 32,000 sits as a credit against next month. The tool shows zero payable and notes the credit carried forward. Refunds are possible in specific situations, such as persistent credits from zero-rated supplies, but they run through a separate KRA application process rather than appearing automatically.
A practical tip. Only claim input VAT you can support with a valid tax invoice carrying the supplier's VAT number. Disallowed or unsupported input claims are the most common reason a VAT return gets adjusted on review, and the KRA can charge penalties on the shortfall. Keep your purchase invoices filed by period so the input VAT figure you enter here matches what you can actually prove.
Do I include zero-rated sales in output VAT?
Zero-rated sales are taxable supplies, so they belong on your return, but the VAT rate on them is 0 percent, meaning they add nothing to output VAT while still letting you reclaim the related input VAT. That combination is what makes zero-rating valuable: it can leave you in a credit or refund position. Do not confuse them with exempt sales, which carry no VAT and block input recovery. Check which category each line falls into with the KRA.
What if I file the return but cannot pay the full amount?
File on time regardless, because late filing and late payment are penalised separately. Filing the return on time avoids the filing penalty even if the cash is short, and you then deal with the payment through a plan or settle it as soon as you can, with interest accruing on the unpaid balance. Sitting on an unfiled return to delay payment is the costliest option, since it triggers both penalties at once.