KRA collects Sh7 mn in January as Turnover Tax is effected

KRA collects Sh7 mn in January as Turnover Tax is effected

February 21, 2020 0 By mykenyancareers
iTAX1 - KRA collects Sh7 mn in January as Turnover Tax is effected
The move is aimed at improving tax collections as well as enhancing safety standards by deterring counterfeits in the country./FILE

NAIROBI, Kenya, Feb 21 – The Kenya Revenue Authority (KRA) collected Sh7 million from traders after it introduced the Turnover Tax (TOT) targeting Micro and Small Enterprises.

Principal Secretary National Treasury Julius Muia said this followed the roll out of the Excisable Goods Management System program in January and the monies collected will boost revenues by the close of the 2019/2020 financial year.

“Turnover Tax came to effect in January and so far we have collected Sh7 million from the reports we have received from KRA,” said Muia.

The TOT rate stands at 3 percent on the gross amount a trader has made on sales. KRA closed the filing of the new tax on Thursday, February 20. Traders will be expect to file their revenues before the next deadline of March 20, 2020.

The move is aimed at improving tax collections as well
as enhancing safety standards by deterring counterfeits in the country.

According to KRA, the government is committed to enhancing and simplifying of taxes to facilitate taxpayers to meet their obligations and TOT is part of this initiative.

“The TOT obligation is a simplified tax regime for Micro and Small Enterprises (MSEs). This obligation allows MSEs to pay taxes through simplified processes,” commissioner domestic taxes Elizabeth Meyo said in an earlier statement.

“Under this simplified regime, taxpayers are not required to prepare complex account records,” she added.  The eligible taxpayers are only required to keep a daily gross sales record.

The move of the new tax levy is aimed at helping the KRA widen its tax base after missing its revenue collection targets in previous financial years.