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Expert explains how turnover tax will kill businesses

James Mburu, KRA Commissioner General

According to Kenya Revenue Authority (KRA), a Turnover Tax (TOT) is a tax payable by small businesses whose gross sales does not exceed or is not expected to exceed Kshs. 5 million per year. It is payable on monthly basis at the rate of 3% on the gross sales by the 20th day of the following month. Turnover Tax came into effect on 1st January 2020.

Hi Cyprian,

I wish you could help Kenyans get away with the imposed turnover tax that is meant to kill businesses in the name of collecting for the government. This is the most silly thing this government has imposed.

Let me give a simple example of a manufacturing industry whose sales turnover are 100milion, 30% of the sales are on credit.Say 1% of your debtors are unrealisable

The cost of raw materials say -85% and the other administrative costs 13%.-total-98m add unrealisable debt of 1m

You pay the turnover tax of 1m in advance

This means your net position is zero, cash flow position is negative 30m (due to unrealisable debts).

What business will an investor has continuing? This will result to loss of jobs, loan defaults, bankruptcy, high insecurity due to joblessness etc….

Then to add insult to injury,whatever hard earned money you pay through the so called taxes goes to the pockets of these greedy leaders.

We need a business minded commissioner who has the interest of every citizen not only of our greedy leaders.

Cyprian, please help

Kenyans, nothing will change if you wait for it to. You have to put in effort.

Article 37 of the constitution chastises us to go against bad governance by peacefully assembling, picketing, demonstrating and petitions.

There are no Luos, Kikuyus, Luhyas, or any other tribe. There’s one Kenya where there are oppressers in govt who must be told enough.

If you are called today to join a petition, picketing, or demos against bad governance, please heed the call.

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