How to File Turnover Tax in Kenya

Hey there! Are you curious about how to file turnover tax in Kenya? Well, you’ve come to the right place. In this conversational article, we’ll walk you through the process step by step, ensuring you have a clear understanding of what needs to be done. So, let’s get started!

What is Turnover Tax?

Turnover tax, also known as TOT, is a simplified tax regime introduced by the Kenyan government to make tax compliance easier for small businesses. It applies to individuals or businesses with an annual turnover not exceeding Kshs 5 million.

Who Should File Turnover Tax?

If you’re a sole proprietor, partnership, or self-employed individual operating a business in Kenya and your annual turnover does not exceed Kshs 5 million, you are eligible to file turnover tax. It’s important to note that turnover tax is applicable to both resident and non-resident businesses.

Registering for Turnover Tax

To file turnover tax, you first need to register for it. Here’s how you can do it:

1. Visit the Kenya Revenue Authority (KRA) website.
2. Navigate to the iTax portal and log in using your credentials. If you don’t have an account, you’ll need to register as a new taxpayer.
3. Once logged in, select “e-Registration” and choose “Turnover Tax.”
4. Fill out the required information, including your personal details, business details, and turnover information.
5. Submit the registration form, and you’ll receive a notification confirming your successful registration for turnover tax.

Calculating and Paying Turnover Tax

Now that you’re registered, it’s time to calculate and pay your turnover tax. Here’s what you need to do:

1. Determine your turnover for the tax period. Turnover refers to the total sales you’ve made within a specific time frame.
2. Calculate the turnover tax amount, which is 3% of your gross sales. This means if your total sales for the tax period were Kshs 500,000, your turnover tax liability would be Kshs 15,000 (500,000 * 0.03).
3. Generate an e-slip from the KRA iTax portal, indicating the turnover tax amount.
4. Make the payment either through an authorized KRA bank account or using other approved payment methods such as mobile money.
5. Ensure you retain a copy of the payment receipt as proof of tax compliance.

How to File Turnover Tax in Kenya

Apart from paying turnover tax, you also need to file periodic returns. Here’s how you can do it:

1. Log in to the KRA iTax portal using your credentials.
2. Navigate to the “Returns” menu and select “File Returns.”
3. Choose the tax obligation as “Turnover Tax” and select the applicable tax period.
4. Fill in the necessary information regarding your business turnover for the specific period.
5. Verify the details, submit the return, and keep a copy of the acknowledgment receipt.

Conclusion

Congratulations! You’ve now learned how to file turnover tax in Kenya. Remember to register for turnover tax, calculate and pay your tax liability promptly, and file returns as required. Compliance with tax obligations is essential for the smooth operation of your business and contributes to the growth of the nation. If you have any further questions or need assistance, feel free to reach out to the Kenya Revenue Authority for guidance. Best of luck with your tax filing journey!



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