VAT for Importers in Kenya 2026: Import VAT, Customs & Compliance

How Import VAT Works in Kenya

Import VAT (also called VAT on imports) is charged at the standard rate of 16% on all taxable goods brought into Kenya. It is collected by the Kenya Revenue Authority (KRA) through the customs clearance process, not through the monthly VAT return system.

The key difference from domestic VAT: you cannot delay paying import VAT until your return is due. Payment must be made before customs releases your goods. This means import VAT directly affects your cash flow and working capital.

Import VAT applies to all commercial imports regardless of whether you are a VAT-registered person. If you are not registered for VAT, you still pay import VAT — but you cannotclaim it back as input VAT. This is why registering for VAT is critical if you import goods regularly.

Certain goods are exempt from import VAT, including:

• Medical supplies and pharmaceutical products (specific HS codes)
• Agricultural inputs such as fertiliser, seeds, and pesticides
• Goods imported under special investment promotion schemes (EPZ, SEZ, etc.)
• Personal effects and household goods for returning residents (limited value)
• Goods specifically exempted under the First Schedule of the VAT Act, 2013

If you are unsure whether your goods qualify for an exemption, it is advisable to obtain a private ruling from KRA or consult a tax advisor before shipping.

Calculating Import VAT: Step-by-Step

Import VAT is calculated on the cumulative value of the goods after adding customs duty and other statutory levies. The formula is:

Where:

• •CIF Value — Cost, Insurance, and Freight. The total landed cost of the goods at the Kenyan port.
• •Import Duty — Customs duty charged at the applicable rate under the EAC Common External Tariff (typically 0%, 10%, 25%, or 35%).
• •IDF — Import Declaration Fee (2% of CIF value for most goods, reduced to 0.5% for EAC-origin goods).
• •RDL — Railway Development Levy (1.5% of CIF value, introduced by the Finance Act 2018).
• •Other Levies — Excise duty (if applicable), Anti-Dumping Duty, or other specific charges.

Worked example: You are importing electronics worth KES 1,000,000 (CIF). Import duty at 25% = KES 250,000. IDF at 2% = KES 20,000. RDL at 1.5% = KES 15,000.

The Import VAT of KES 205,600 is what you pay at customs and later claim as input VAT on your VAT return. Note that the duty, IDF, and RDL are not recoverable — only the VAT component is available for input deduction.

How to Pay Import VAT

KRA has streamlined import VAT payments through the SIMBA (SIMIS) System — the customs management system that replaced the older Simba system. All payments must be made through one of the following methods:

1. SIMA Customs Portal

The primary method is through the SIMA (Single Import Market Access) portal at sima.kra.go.ke. After your customs declaration is assessed and a payment slip (PSS) is generated, you can pay online via:

• •Direct bank transfer from your Kenyan bank account
• •Visa or Mastercard debit/credit card
• •M-PESA Paybill 572572 — enter your PSS number as the account number
• •Airtel Money or other mobile money services

2. M-PESA Paybill 572572

M-PESA is the most widely used payment method for import VAT at Kenyan ports. The KRA paybill number 572572 accepts payments for customs assessments. You need your Payment Slip Serial (PSS) number, which is generated after customs processes your import declaration (ID).

3. Bank Payments

You can pay directly into KRA's customs revenue accounts at:

• •Central Bank of Kenya — KRA Customs Collection Account
• •Kenya Commercial Bank (KCB) — designated KRA customs branches
• •Co-operative Bank — KRA customs revenue account
• •National Bank of Kenya — customs collection accounts

Bank payments typically take 2–4 hours to reflect in the SIMA system. If you are clearing goods at Mombasa port or Jomo Kenyatta International Airport (JKIA), plan for this delay.

Timing of Payment

Import VAT must be paid before goods are released from customs control. The process flow is:

1. 1.Submit import declaration (ID) through SIMA or through your clearing agent.
2. 2.Customs assesses the declaration and generates a payment slip (PSS).
3. 3.Pay all charges (including import VAT) via M-PESA, bank, or card.
4. 4.Payment reflects in SIMA and customs flags the consignment as cleared.
5. 5.Goods are physically released from the port or bond warehouse.

Failure to pay promptly results in storage charges and demurrage at the port, which can significantly increase your total cost of importation.

Claiming Input VAT on Imports

The import VAT you pay at customs is recoverable as input VAT — provided you meet the conditions under Section 17 of the VAT Act, 2013.

Conditions for Deduction

• You must be registered for VAT in Kenya.
• The imported goods must be used for taxable supplies (not exempt supplies).
• You must hold a valid customs entry document (C88) and a payment receipt (C90).
• The import VAT must have been paid (not just assessed).
• The claim must be made within the VAT return period in which the goods were entered for home use.

How to Record Import VAT in Your Return

On your VAT return (online through iTax), import VAT is recorded in Box 5 (Input VAT)under the sub-category for import VAT. You will need to enter:

• •The total CIF value of imported goods
• •The total import VAT paid (from your customs entry documents)
• •The number of customs declarations covered

Important: If the eTIMS system detects imported goods being sold without corresponding import entries, KRA may flag your return for audit. Always match your import entries with your stock records.

Timing of the Claim

You claim import VAT in the VAT return period when the goods are entered for home use(i.e., cleared through customs). This is the date on your customs entry document (C88). If you clear goods in July, you claim the input VAT in your July VAT return (due by the 20th of August).

eTIMS for Importers: Invoicing Imported Goods

Since the rollout of eTIMS, importers must issue eTIMS-compliant invoices when selling imported goods in Kenya. The system tracks your stock and ensures that goods imported correspond to goods sold.

ETR vs eTIMS for Importers

If you are using the older Electronic Tax Register (ETR), you should have migrated to eTIMS. For importers, eTIMS offers a significant advantage: it links your import entries (via SIMA) to your sales, giving KRA a complete view of your import-to-sale cycle. This means:

• •Every imported item in your stock should match an eTIMS invoice when sold.
• •KRA can cross-reference your VAT return input claims with your eTIMS stock movements.
• •Discrepancies between imports declared and goods sold can trigger an automatic audit.

Stock Tracking for Importers

Importers who maintain inventory benefit from the eTIMS stock module, which allows you to:

• Record goods received against import declarations
• Issue invoices that deduct from available stock
• Generate stock reports showing cost of goods sold
• Identify variances between physical stock and system records

If you use an ERP system (Sage, SAP, QuickBooks, etc.), you should consider the ERP-integrated eTIMS solution, which automatically sends invoice data to KRA from your existing system. This is the most efficient option for high-volume importers.

eTIMS Invoicing Requirements

When selling imported goods, your eTIMS invoice must include the same mandatory fields as any other eTIMS invoice: seller details, buyer details (PIN for B2B), item descriptions, quantities, prices, VAT amount, and a QR code. There is no separate "imported goods" classification on the invoice itself, but your stock records must trace each item back to its import declaration.

Common Import VAT Mistakes

Import VAT mistakes are among the most common issues KRA auditors identify. Here are the pitfalls to avoid:

• Not keeping customs entry documents — You must retain C88 (customs entry) and C90 (payment receipt) for at least 5 years. Without these, your input VAT claim will be rejected on audit.
• Claiming input VAT before goods are cleared — You can only claim import VAT after the goods have been entered for home use. Pre-paying VAT on a deposit does not entitle you to an immediate claim.
• Incorrect CIF values — Declaring a lower CIF value to reduce duty and VAT is illegal (customs fraud). KRA uses transaction value databases and may apply penalties of up to 200% of the duty evaded.
• Missing payment deadlines at customs — Once your PSS is generated, most payments must be completed within 7 days or the declaration expires. Delays lead to re-assessment and additional storage costs.
• Not reconciling import VAT with eTIMS stock — If your eTIMS sales records show goods that do not correspond to your import declarations, KRA will flag your account for audit.
• Failing to apportion import VAT for mixed-use goods — If you import goods used for both taxable and exempt supplies, you must apportion the input VAT. Claiming full input VAT on mixed-use goods is a common audit adjustment.
• Using the wrong HS code — An incorrect HS code can lead to underpayment or overpayment of duty and VAT. KRA may re-classify goods and issue additional assessments.

Related Resources

• Input VAT Deduction Guide — How to properly claim input VAT including import VAT, conditions, and apportionment
• How to Register for VAT in Kenya — Step-by-step VAT registration process — required if you import goods regularly
• eTIMS Invoicing Guide — Mandatory invoice fields, QR codes, B2B vs B2C rules, and stock tracking
• eTIMS Onboarding Guide 2026 — How to register and set up eTIMS for your business