One is only required to register for VAT as a business if your turnover of taxable sales exceeds KES 5 million per year. This turnover only includes sale of goods and services which are subject to VAT at a rate of 16% or 0%.
Where an individual / business has only exempt sales or their turnover of taxable sales is below KES 5m in a year, then such person is not required to register for VAT and is also not supposed to charge VAT.
Where a person voluntarily registers for VAT but fails to file a VAT return on a monthly basis, such person would be subject to a minimum monthly penalty of KES 10,000.
