Turnover Tax (TOT) Guide for Small Businesses in Kenya
Turnover Tax (TOT) is a simplified monthly tax target aimed at micro, small, and medium-sized enterprises (MSMEs) whose gross business turnover does not exceed KES 25 million per year.
Turnover Tax Regulations & Thresholds:
- Tax Rate: Charged at a flat rate of 3% on the gross monthly business sales. Deductions for operating expenses are not permitted under this simplified regime.
- Eligibility Limits: Businesses earning between KES 1 million and KES 25 million annually qualify for TOT. Businesses earning below KES 1 million or above 25 million are subject to normal corporate taxes instead.
- Filing Deadlines: Declared and paid monthly on the KRA iTax portal on or before the 20th of the following month.