500,000 small businesses registered under the turn-over tax

Written By: Regina Manyara - Gitau
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Half a million small businesses have registered under the turn-over tax

Half a million small businesses have registered under the turn-over tax, which is part of government’s strategy to widen the tax base.

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Kenya Revenue Authority Commissioner for Domestic Taxes Elizabeth Meyo says the taxman expects to net at least 1 million shillings in turnover tax from small businesses mainly drawn from the informal sector.

The re-introduction of turnover tax, where businesses whose income does not exceed 5 million shillings are to pay 3 pc on gross sales, was not well received by those in the informal sector, when it came into force last month.

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Critics said the tax would frustrate small businesses and increase the cost of doing business. So far over half a million small businesses have registered for turn over tax with KRA training its eyes on more registrations from small businesses.

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KRA requires businesses to file their turnover tax on or before the 20th of the following month.

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Even though KRA says no penalties will meted on defaulters during the transition period, late payment will attract a 5% penalty whereas late filing will attract a 5,000 shillings penalty per month.

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KRA plans to roll out a USSD number that will enable taxpayers file their returns using their mobile phones.

The Kenya Revenue Authority aims to raise an additional 25 billion shillings this financial year under the tax widening strategy.

 

 

 

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