How do I calculate VAT

VAT operates on an Input - Output Principle. A registered person should maintain a record of his sales and purchases for a tax period.

Input tax refers to VAT charged on purchases of taxable purchases and expenses for business purposes.

Output tax refers to the VAT charged on the sales of taxable goods or services.

Tax payable is the difference between the Output tax and the Input tax.

Output Tax - Input Tax = VAT Payable

 If positive, tax due is payable on or before the 20th of the following month.

What is gaming?

Gaming refers to the playing of a game of a chance for winning in money or money’s worth.

What is gaming revenue?

This is the gross turnover less the amount paid out to customers as winning.

When is the gaming tax paid?

The tax must be remitted by the 20th day of the month following the month of collection by a person carrying on a gaming business.

What is lottery?

Lottery is defined to include a sweepstake, a raffle or any scheme or device for the sale, gift disposal or distribution of any property depending upon or to be determined by lot or chance, whether by the throwing or casting of dice, or by the withdrawing of tickets, cards lots numbers or figures or by means of wheel.

What is tax charged on lottery?

The lottery tax is charged at a rate of 15% of the lottery turnover.

When is the lottery tax paid?

The lottery tax must be remitted to the collector by a person authorized to promote the lottery on the 20th day of the month following the month of the collection.

What is betting?

Betting transaction includes collection or payments of winning on a bet and any transaction in which one or more of the parties is acting as a bookmaker.

Who is a bookmaker?

A bookmaker is defined as any person:

  1. Whether on their own behalf or as a servant or agent carries on whether occasionally or regularly the business of receiving or negotiating bets.
  2. A person who holds himself out in any manner as a person who receives or negotiates bets.
  3. A person who permits himself to be held out in any manner as a person who receives or negotiates bets.


What is tax charged on betting?

Betting tax is charged at the rate of 15% of the revenue generated from betting.

When is the betting tax paid?

The betting tax must be remitted by the 20th day of the month following the month of collection.

Are winnings taxed?

The Tax Laws (Amendment) Act reintroduced WHT on winnings at the rate of 20%.

What are winnings ?

Winnings include money won, spoils, profits, or proceeds of any kind that refer to the amount or payment of winnings. The effect of this new definition is that Withholding Tax (WHT) will now be imposed on the gross winnings payable by all sectors governed by the Betting, Lotteries and Gaming Act, that is: Betting, Lotteries, Gaming and Prize Competition.

What are Customs Auction Sales?

A customs auction sale is the sale of goods to the highest bidder so as to dispose of goods not lawfully removed from the Customs Warehouse after a certain period.

What Law supports the existence of Public Auctions?

Section 42 of the East Africa Community Customs Management Act, 2004 authorises the Customs Warehouse keeper to sell any goods deposited in the Customs Warehouse subject to a number of procedures.

What does the entire auction process entail?

Section 42 of the EACCMA, 2004 provides that where any goods which have been deposited in a Customs warehouse are not lawfully removed within thirty days after deposit, then the Commissioner shall give notice by publication in the Gazettes of the Partner State or newspaper of wide circulation in the Partner State that unless such goods are removed within thirty days from the date of notice they shall be deemed to have been abandoned to Customs for sale by public auction and may be sold in such manner as the Commissioner may deem fit.

The gazette notice states the date when prospective bidders will view the goods and the actual date of the auction

Customs together with the other partner government agencies will verify the lotted goods to determine the reserve price and if the goods meet the required quality standards respectively. The reserve prices are approved by Commissioner Customs & Border Control. 

The Commissioner appoints an Auctioneer who will then conduct the auction process under guidelines outlined in Regulation 207 of East African Community Customs Management Regulations.

The successful bidder will pay a non-refundable deposit of 25% of the bid price at the fall of the hammer and the balance of 75% paid within 48 hours.

What types of goods does KRA auction?

Goods verified by KEBS and found to be meeting the required quality standards and cleared for release in to the local market. This covers all categories of goods imported into the country that were not cleared from the port of entry within the allowed period.

There have been cases where KRA destroys impounded goods. What does KRA look at in determining which goods are for auction and which are for destruction?

Customs will facilitate the destruction of prohibited goods at the expense of the importer. The following are the factors that inform destruction of goods by Customs:

  1. goods that fail to meet quality standards set by Kenya Bureau of Standards, Port Health, Pharmacy & Poisons Board and any other Government Agency
  2. expired goods
  3. counterfeited goods impounded and processed by the Anti-Counterfeit Agency (ACA).

What are Conditions for Sale?

Conditions for sale are guidelines applied at all Customs Auctions Sales based on legal provisions in the East Africa Community Customs Management Regulations. These conditions must be read out in either English or Swahili at the beginning of every auction and all bidders are bound by these conditions. The auctioneer sets the conditions for that day.

Can goods be withdrawn before a sale?

Yes, the owner of any goods advertised may write to the commissioner and notify him/her of the particulars of the goods he wishes to have withdrawn and satisfy the commissioner that they are the owners of the goods. This must be done in not less than seven days to the day of the sale.

Goods can also be withdrawn if they are entered (declared and taxes duly paid) before the day of the auction. Goods are deemed to belong to the owner until the day of the auction/notice period elapses.