How To File For Introduced Turn Over Tax (TOT) For Your Micro And Small Enterprise In 2020

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At the beginning of 2020, Turnover Tax (TOT) officially came into effect. TOT is the tax payable by small businesses whose gross sales do not exceed Ksh5 Million per year. The tax is payable on a monthly basis at the rate of 3% of the gross sales of the business. This year’s first TOT deadline was 20th February and many businesses risk penalties from the taxman if they do not register, file and pay the January 2020 tax returns for the Turnover Tax. The eligible taxpayers are only required to keep a daily gross sales record.

How To Register, File & Pay For Turnover Tax

 Registration is done through the KRA iTax portal. Since Presumptive Tax and Turnover Tax go hand in hand, with TOT you will have to add business as a source of income in your KRA PIN, then add the Turnover Tax under tax obligations. You will need to have your Business Registration Certificate to fill in details in the Business Income Details Section. Now go ahead and apply for Turnover Tax Registration and at the same time amend the source of income to Business Income on iTax Portal. Once you are done, download the Turnover Tax Acknowledgement Receipt. This could take up to 3 working days and via your email, a confirmation will be sent.

Turnover Tax is paid on the 20th day of every month effective 20th February 2020. Once you added business as a source income in your KRA PIN and at the same time added the Turnover Tax as a tax obligation.

The TOT tax does not apply to persons; registered for VAT, with business income of Kshs 5,000,000 and above, Employment Income, Rental Income, Limited Liability Companies, Management and Professional Services among others. Eligible taxpayers are advised to log onto iTax, add the TOT obligation, file the monthly returns and make payment.

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Melissa Daniels
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