Does water have VAT in Kenya?
To set the record straight, any water that is not packaged, that is, tap water or water coming directly from a natural source does not attract any tax. However, once water is purified and bottled for sale, it becomes excisable. An excisable product is a product that attracts excise duty.
What is excise duty in Kenya?
What is Excise Tax? Excise duty in Kenya, commonly referred to as “sin tax” is an indirect tax on the (s.5(1)EDA) importation or. local manufacture of certain products and. supply of excisable services.
How does excise duty work in Kenya?
Excise duty is imposed on the local manufacture or the importation of certain commodities and services. Excisable commodities include bottled water, soft drinks, cigarettes, alcohol, fuels, and motor vehicles.
Who pays VAT in Kenya?
It is levied on the use of taxable products and services supplied or imported into Kenya. The tax is collected by registered persons at designated points in the supply chain and remitted to KRA. Only registered traders with an annual turnover of KShs. 5 million and above are required to charge VAT.
Is water subject to VAT?
Supplies of water and ice (except heated water, distilled water, or mineral waters etc.) are VAT-exempt for domestic customers.
How is excise duty calculated?
The indirect tax of excise duty is generally collected by the retail seller from the customers and paid to the government. This duty is payable on the manufacture of goods. It is payable at the time of taking delivery of the goods from the place of production or from the warehouse for the purpose of selling.
Who is liable to pay excise?
Ans: The term “Excisable Goods” means the goods which are specified in the first Schedule and the second schedule to the Central Excise Tariff Act, 1985 as being subject to Excise Duty. 6. Who is liable to pay Excise Duty? Ans: The manufacturer or the producer of goods is liable to pay Excise Duty.
How can I avoid paying tax in Kenya?
How to reduce your tax obligations in Kenya
- Pension with a registered retirement benefits scheme. This option allows you to both reduce your tax obligation and save for your retirement. …
- House Ownership Savings Plan (HOSP) …
- Life Insurance. …
- Investing in tax free instruments. …
- Disability relief.
What are 3 types of taxes?
Tax systems in the U.S. fall into three main categories: Regressive, proportional, and progressive. Two of these systems impact high- and low-income earners differently. Regressive taxes have a greater impact on lower-income individuals than the wealthy.
What is the difference between an excise tax and a sales tax?
Sales tax applies to almost anything you purchase while excise tax only applies to specific goods and services. Sales tax is typically applied as a percentage of the sales price while excise tax is usually applied at a per unit rate.
What is the difference between import duty and excise duty?
The duty which is levied on the goods which are manufactured in the country is called excise duty whereas the duty which is levied on the goods which are imported from a foreign country is called as custom duty.
How much is import duty in Kenya?
Imports into Kenya are subject to a standard VAT rate of 16%, levied on the sum of the CIF value, duty, and other applicable taxes. An import declaration fee of 3.5% and railway development levy of 2%. Tariff rates can be estimated by visiting Kenya Revenue Authority .