1. VAT Module 4: Charge to VAT
©Dr. Wakaguyu wa-Kiburi (
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

2. Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
Scope
Charge to VAT
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

3. Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
VAT on
VAT Charged on
Taxable supply made by a registered person in Kenya.
2) Importation of goods.
3) Supply of imported taxable services.
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

4. Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
Rate of VAT
Rate of Tax
Zero rated supplies – Zero (0 ) per cent.
Any other case 16 % or 8% of the taxable value of:
The taxable supply.
Value of imported taxable goods.
Value of a supply of imported taxable services.
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

5. Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
Rate of VAT
Note: the use of the word value – the item plus all others related goods and services.
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

6. Liabilities of a Registered Person
Tax on a taxable supply is the liability of the registered person making the supply.
Also accounting and payments.
Tax is due at the time of supply –
Amount of tax due is recoverable from the receiver of the supply plus any other considerations (penalties and interests?)
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

7. Liabilities of a Registered Person cont’
Tax on importation is:
charged as if it was a duty of Customs – determination and collection is by Customs.
Due and payable by the importer at the time of importation.
Who is an importer?
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

8. Liabilities of a Registered Person cont’
Tax on imported services is:
the liability of the registered person receiving the imported services
accounts and pays for it
due at the time of supply.
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

9. Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
Questions
Wafula paid VAT kshs 500,000 on importation of raw materials from China. Explain how the VAT amounts were arrived at.
What is the effect of increasing excise duty on VAT?
What is the effect of increasing import duty on VAT?
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

10. Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
Questions cont’
Alex sold taxable goods for kshs 100,000. He did not have any input tax nor VAT credits carried forward. The buyer did not pay Alex who then failed to remit the VAT when due. Later, Alex was asked by KRA to pay the money.
Question: How much was Alex asked to pay?
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

11. Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
Questions cont’
Niel imported a raw and paid kshs 300,000 VAT. He also bought raw materials locally and paid VAT worth kshs 200,000. In addition he imported services whose VAT was kshs 50,000. He did not have any sales that month.
Question: How much VAT was he expected to remit to KRA?
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi

12. Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
Q & A
9/19/2019
Prepared for by Dr. Wakaguyu wa-Kiburi