Patriotic tax is on the way at 3%

id : 82 Tax Policy   
posted by : Admin
 DOQ : 2020-01-21 06:03:58

Traders operating small and mid-sized businesses will from today start paying a three percent tax on their sales to the Kenya Revenue Authority (KRA) following the re-introduction of the levy, which looks set to hurt enterprises struggling with low revenues.

The Finance Act 2019, which President Uhuru Kenyatta signed into law on November 7, reintroduced the turnover tax for businesses whose annual sales are below Sh5 million to boost tax collections.

The new tax takes effect today and is expected to saddle small traders, who have raised concerns about deteriorating business conditions, with additional operating costs.

It is also expected to provide the KRA, under pressure to collect additional revenue, with a fresh avenue for raising taxes from small traders, the majority of whom have not been paying State levies.

The Treasury had in 2018 dropped the turnover tax due to its poor performance as most traders failed to make revenue disclosures.

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