The Kenya Revenue Authority (KRA) has announced that small-scale traders will now pay Turnover Tax (TOT) on a daily basis instead of monthly, a move designed to ease tax compliance and improve cash flow for small businesses.
George Obell, KRA Commissioner for Micro and Small Taxpayers, said the measure will simplify tax processes for traders while promoting timely compliance.
“KRA is committed to supporting businesses through enhanced services, simplified tax solutions, and continuous public engagement,” the Authority stated.
“The introduction of daily Turnover Tax payments is aimed at easing cash flow challenges for small businesses and promoting compliance.”
Turnover Tax is levied on a business’s gross revenue, before deducting expenses such as rent, wages, or transport. It applies to businesses with annual gross turnover between Ksh 1 million and Ksh 25 million, at a rate of 15% of gross earnings. Late payments attract a penalty of Ksh 1,000 per month.
Previously, small traders had to calculate and pay TOT at the end of each month, which often posed difficulties since cash was already allocated to stock, rent, or other operational costs.
Under the new daily payment system, traders can pay small amounts based on daily sales, reducing the burden of one large monthly payment.
According to KRA, the new system is expected to promote fairness, broaden the tax base, and create a more supportive environment for business growth.
“KRA remains focused on expanding the tax base, ensuring fairness, and fostering a collaborative environment that supports business growth and voluntary compliance,” the Authority added.
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