Turnover Tax: A Simple And Convenient Way To Grow Your Business

By Steve Biko Wafula / Published November 24, 2023 | 2:13 pm



KRA

If you are a business owner with a turnover between Kshs. 1,000,000 and Kshs. 25,000,000 in any year of income, you may be wondering how to comply with the tax laws and regulations in Kenya.

You may also be looking for ways to simplify your tax obligations and reduce your administrative costs. If so, Turnover Tax (TOT) is the perfect solution for you!

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TOT is a tax regime that applies to small and medium enterprises (SMEs) with a turnover between Kshs. 1,000,000 and Kshs. 25,000,000 in any year of income.

TOT is payable monthly on or before 20th of the following month at a rate of 3% on gross sales. This means that you only pay tax on the amount of money you receive from your customers, without deducting any expenses.

Read Also: Celebrating Taxpayers’ Day In Kenya: Recognizing Contributions To National Development

By registering for Turnover Tax, you are not just complying with the law; you are empowering your business for growth! Here are some of the benefits of TOT:

  1. Reduced administrative requirements: You do not need to keep detailed records of your income and expenses, or file annual returns. You only need to keep a record of your gross sales and pay tax on them every month.
  2. Simplified processes: You do not need to deal with complex tax calculations or multiple tax rates. You only need to apply a flat rate of 3% on your gross sales and pay the tax online through iTax.
  3. Enhanced cash flow: You do not need to pay tax in advance or make provisional tax payments. You only pay tax after you receive your income, which helps you manage your cash flow better.
  4. Increased savings: You do not need to hire an accountant or a tax consultant to handle your tax affairs. You can easily register, file, and pay your taxes yourself through iTax, saving you time and money.

Read Also: Kenya Celebrates Outstanding Taxpayers In Grand Gala: Building Kenya Through Tax Compliance And Excellence

To register for Turnover Tax, you only need to follow these simple steps:

  1. log in to iTax using your PIN and password via [iTax]
  2. Click on the Registration module, select ‘amend PIN details’
  3. Under section ‘A’, basic information click on yes under the question ‘Do you want to register for TOT?’
  4. Under the section ‘B’ Obligation details, select the date of registration of TOT and apply.

For more information on Turnover Tax, visit the KRA website, [www.kra.go.ke] or call us on 020 4 999 999 or 0711 099 999 or email: callcentre@kra.go.ke

Log on to [iTax] TODAY to register, file, and pay your turnover tax. Turnover Tax is a simple and convenient way to grow your business and contribute to the development of Kenya. Don’t miss this opportunity to join the TOT regime and enjoy its benefits!

Read Also: Ruto Reiterates Government’s Commitment To Enhance Efficiency Of The Tax System




About Steve Biko Wafula

Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters.He can be reached on: +254 20 510 1124 or Email: info@sokodirectory.com

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