What is Turnover Tax (TOT)?
Turnover tax is a simplified Kenyan tax charged on the gross sales (turnover) of a business, rather than on profit, aimed at small businesses whose annual turnover falls below the VAT registration threshold.
A real Kenyan example
A small kiosk with modest annual turnover below the VAT threshold pays turnover tax as a percentage of its gross sales instead of filing VAT and standard income tax.
Why it matters
Turnover tax is simpler to compute than income tax because it does not require tracking deductible expenses, but it also means tax is due even in a low-margin period, since it is based on sales, not profit.
How Veira helps
Veira records every sale, so your turnover figure for TOT is always accurate and ready when you need to file, no reconstructing sales from memory.
FAQs
Who pays turnover tax in Kenya?
Small businesses whose annual turnover falls within the band set for turnover tax, below the VAT registration threshold. Confirm the current threshold and rate at kra.go.ke, as they can change.
Is turnover tax based on profit or sales?
Sales (turnover), not profit. It applies even if your margins are thin in a given period.
Can a business choose between turnover tax and normal income tax?
Eligibility and any election rules are set by KRA and can change; confirm your specific options and current thresholds at kra.go.ke or with a tax professional.
Does a turnover-tax business still need eTIMS?
Generally yes, eTIMS invoicing obligations for issuing compliant receipts apply broadly. Confirm your specific obligations at kra.go.ke.
How often is turnover tax filed?
Filing frequency is set by KRA and can change; confirm the current filing schedule at kra.go.ke.