Sales Tax: Small and medium business owners will from today start paying a sales tax to the Kenya Revenue Authority (KRA). This follows the re-introduction of the levy by the President Uhuru Kenyatta’s government.
The tax has been set at 3 per cent. It comes as bad news at the beginning of the year after a tough economic 2019 year.
The tax is contained in the Finance Act 2019 which President Uhuru signed into law on November 7. The levy will target entrepreneurs whose annual sales are below Sh. 5 million.
According to a report that appeared in a local daily, KRA says that the presumptive tax will remain an advance tax that will be deducted against the turnover tax.
“Maurice Oray, the deputy commissioner for corporate policy at KRA, defended the decision to retain the presumptive tax alongside the turnover tax. He argued that the presumptive tax would be key in collecting data on small traders who largely operate informally for the purposes of enforcing the three percent-monthly turnover tax. KRA’s analysis ahead of introduction of presumptive tax in 2018 indicated that some 1.56 million taxpayers with single business permits had not registered under the turnover tax regime,” says the report on the sales tax.
