Kenya Post raises rates to comply with new VAT rules
The Postal Corporation of Kenya is now charging Value Added Tax on its services under new government legislation. Kenya’s national postal service began adding VAT to its fees as of 3rd February to comply with legislation implemented back in November.
In a statement, the Post confirmed that the government’s National Treasury will collect VAT amounting to 16% of service charges, from all postal services, with tax revenue going to the Kenya Revenue Authority.
“We wish to take this opportunity to express our sincere gratitude for the continued support and confidence in our Postal Services as we strive to discharge our mandate and obligations at all times,” the public commercial enterprise said.
The added tax will mean that a basic domestic letter up to 20g in weight has seen postage rates increase from KES 30 ($0.34 USD) to KES 35 ($0.41 USD).
Small domestic packets up to 100g in weight will see rates rise from KES 40 ($0.46 USD) to KES 50 ($0.58 USD).
Among other price changes with VAT, international letters up to 20g sent to destinations within Africa will see rates increase from KES 75 ($0.87 USD) to KES 90 ($1.04 USD), while 20g letters going to Europe will rise from KES 90 to KES 105 ($1.22) USD, and to Australia and the US from KES 110 ($1.27) to KES 130 ($1.50).
VAT
Kenya’s government brought in VAT, leveled at 16%, on a range of new items last autumn, including milk, bread, electricity, books, computers, mobile phones and farming products. Banking services attract a VAT level of 10%.
The new VAT rules intend to reduce the number of VAT-exempt items so that tax authorities in East Africa’s biggest economy can provide faster VAT refunds to businesses, the government has said.
Extra taxes from consumables can also help to reduce the nation’s budget deficit, which is currently about 7.9% of GDP.
