The short answer
Margin is only knowable if cost includes transport and what was lost getting goods onto the shelf, because margin against the buying price alone flatters every line in the shop. For agencies specifically, that plays out against how the trade already sells and to whom.
Pricing and margin for agencies
No inventory, but pass-through media and production costs that must be billed accurately and separated from the agency's own fee. That is the background against which pricing and margin has to work in this trade.
What invoicing actually looks like here
Invoice trade where the document often has to separate the agency fee from pass-through media spend, because the client treats the two differently and so does the tax position.
What the rules say
This page explains how a requirement generally works. It is not tax advice, and it cannot account for the specifics of any one business. For a position you intend to rely on, confirm with KRA directly or with a registered tax agent.
Tax rules in Kenya change with each Finance Act and with regulations made during the year. Before acting on any figure, deadline or threshold, check the current position on KRA's own website.
What we are not stating here. Some of the specific requirements relating to this topic have not yet been verified against their primary source by our reviewer, so they are withheld from this page rather than stated from memory. That means you will not find a threshold, rate, deadline or penalty figure below. For those, check KRA directly. Everything else on this page explains how the mechanism works and is not affected.
Knowing the margin requires knowing the cost
A surprising number of businesses can state their selling price precisely and their true cost only approximately, because cost means the buying price plus transport plus whatever was lost or damaged getting it onto the shelf. Margin computed against the buying price alone flatters every line in the shop.
Wholesale price changes are the silent problem
When a wholesaler raises a price and the shop does not notice, the margin on that line goes down and nothing announces it. Retailers discover this at the end of a month that felt busy and was not profitable. Checking buying prices against selling prices on the fast-moving lines, regularly, catches it.
Where this goes wrong
- Pass-through costs absorbed instead of billed
- Client approvals delaying invoicing
- Withholding tax on professional fees
Common questions
Does a agency need to issue a tax invoice for every sale?
Invoice trade where the document often has to separate the agency fee from pass-through media spend, because the client treats the two differently and so does the tax position.
What usually goes wrong with records in a agency?
The recurring problems in this trade are pass-through costs absorbed instead of billed; client approvals delaying invoicing; withholding tax on professional fees; freelancer costs against project margins. Each of them shows up in the records before it shows up in the bank balance.
How should a agency keep stock records?
No inventory, but pass-through media and production costs that must be billed accurately and separated from the agency's own fee. Records that do not reflect that pattern will not tell you anything useful, whatever system produces them.
How do I know this information is current?
Tax rules in Kenya change with each Finance Act and with regulations made during the year. Before acting on any figure, deadline or threshold, check the current position on KRA's own website.
Sources
- officialKenya Revenue Authority — Kenya Revenue Authority, checked 2026-09-18
- officialeTIMS (Electronic Tax Invoice Management System) — Kenya Revenue Authority, checked 2026-09-18
- officialValue Added Tax Act, 2013 (Act No. 35 of 2013) — National Council for Law Reporting (Kenya Law), checked 2026-09-18