Quick Answer
The taxes most Kenyans encounter are income tax (including PAYE deducted from salaries), Value Added Tax on goods and services, and excise and customs duties. Small businesses may also pay turnover tax, and landlords pay rental income tax.
Key facts
- Income tax applies to individuals and companies.
- PAYE is income tax deducted from salaries by employers.
- VAT is charged on most goods and services.
- Excise and customs duties apply to specific and imported goods.
Income tax and PAYE
Income tax is charged on what individuals and companies earn. For employees, it is collected as PAYE (Pay As You Earn) — deducted monthly by the employer and remitted to KRA — and summarised each year on a P9 form.
VAT, excise and customs
Other major taxes are:
- VAT (Value Added Tax) — charged on most goods and services; registered businesses file monthly.
- Excise duty — on specific goods such as fuel, alcohol and airtime.
- Customs duties — on goods imported into Kenya.
Taxes for small businesses and landlords
Smaller traders may pay Turnover Tax (TOT) on gross sales, and landlords pay a rental income tax on property income — each with its own rate and rules.
Tax rates and bands are set by the annual Finance Act and change — confirm current rates before relying on them.
Why this matters to you
You pay several of these every day without noticing — in your payslip, your shopping, your fuel. Knowing what they are demystifies your payslip and helps you plan and stay compliant.
Frequently asked questions
What is PAYE?
Income tax on salaries, deducted monthly by your employer and remitted to KRA.
What is VAT?
Value Added Tax, charged on most goods and services.
Do small businesses pay tax?
Yes — often Turnover Tax on gross sales, among other obligations.
Sources & references
- Income Tax Act; VAT Act, 2013; Excise Duty Act — kenyalaw.org
- Kenya Revenue Authority — kra.go.ke