This archive report was first published on 10 January 2020.
Kenya Revenue Authority (KRA) has set a target to raise KSh 25 billion in turnover tax revenue within the next six months. To achieve this, the agency is exploring mobile payment options to facilitate the collection of the tax.
According to a tax expert at KRA, the authority plans to include an additional 520,000 businesses in the turnover tax base. This move is part of an initiative to widen the tax base and improve efficiency in tax collection.
The turnover tax, which was first introduced in 2008, requires businesses to pay a 3% tax on gross annual sales. However, the tax failed to yield the desired results and was scrapped off. KRA made two previous attempts to reinstate the tax in 2012 and 2020, but it was only in 2020 that the tax was successfully reinstated.
As of January 1, 2020, small businesses with annual sales below KSh 5 million are required to pay a 3% tax on their gross sales. The tax is expected to bring in significant revenue for the government, and the KRA is optimistic that the mobile payment plan will help achieve this goal.
