Turnover and Presumptive Taxes to benefit SMEs says KRA

Turnover and Presumptive Taxes to benefit SMEs says KRA

January 15, 2020 0 By mykenyancareers
safe image - Turnover and Presumptive Taxes to benefit SMEs says KRA
KRA Commissioner General James Githii Mburu/CFM – Moses Muoki

NAIROBI, Kenya, Jan 15 – The Kenya Revenue Authority says that the re-introduction of both the Turnover (TOT) and Presumptive tax is for the benefit of all Kenyans.

Through a statement in the local dailies, the Authority points out that this will fairly spread the responsibility of developing the country to all citizens and residents of Kenya.

It explained that other benefits of these taxes include simplified filing and payment processes. Eligible taxpayers will only be required to keep a daily gross sales record.

It further pointed out that the tax rate of 3 percent is lower relative to other rates of tax on income and that an individual is not required to file monthly VAT returns.

Turnover Tax is payable by any resident person whose turnover from business does not exceed or is not expected to exceed Kshs 5,000,000 during any year of income.

The TOT does not apply to employment income, Rental income, limited liability companies, management and professional services.

TOT payers are also liable to pay Presumptive Tax at a rate of 15 per cent of the Single Business Permit fee payable or license payable. However, Presumptive Tax paid will be offset against the TOT payable.

Eligible taxpayers are advised to log onto iTax, add the TOT obligation, file the monthly returns and make payment,they will be required to register online or through their mobile phones.

A tax payer can choose not to be subject to the TOT and presumptive tax by applying to the commissioner in writing in which case the taxpayer is expected to prepare accounts and file returns annually under the normal income tax regime.