The Tax Law Tax Amendment Act brought into effect the following changes:
Turn Over Tax is not applicable to the following income;
The taxpayers whose turnover from businesses is Kshs 1 Million and below shall be exempt from Turn Over Tax.
Further guidance by the Kenya Revenue Authority on filing Turn Over Tax returns
A person is required to register for Value Added Tax if he/she has made or expects to make Kshs 5 Million in a period of 12 months.
Some of the taxpayers under Turnover Tax regime whose annual gross receipts/turnover is Kshs 5 Million and above are obliged to register Value Added Tax which is remitted not later than the 20th of the following month.
When computing for Turn Over Tax, the taxpayers registered for Value Added Tax shall deduct the Output VAT from the gross receipts before applying the 1% rate for Turn Over Tax.
See the illustration below;
Amount in Kshs. | |
Total Gross Receipts in a Month | 600,000 |
Output VAT | 73,684 |
Total Receipts to be declared in the Turn Over Tax Return | 526,316 |
Turn Over Tax Payable ( at 1%) | 5,264 |
It is important for all the taxpayers to note that the due date for Turn Over Tax is on or before 20th of the following month.