How to File Turnover Tax in Kenya: A Step-by-Step Guide
Are you a business owner in Kenya wondering how to file turnover tax in Kenya? Filing turnover tax can be a daunting task, especially for those who are new to the process. However, with the right guidance, it can be a straightforward process. In this article, we will take you through the step-by-step process of how to file turnover tax in Kenya, ensuring you comply with the Kenya Revenue Authority (KRA) requirements.
Understanding Turnover Tax in Kenya
Before we dive into the filing process, it’s essential to understand what turnover tax is and who is required to file it. Turnover tax is a tax on the gross turnover of a business, and it’s applicable to small and medium-sized enterprises (SMEs) with an annual turnover of between KES 500,000 and KES 5 million. If your business falls within this bracket, you are required to file turnover tax with the KRA.
The turnover tax rate in Kenya is 3% of the gross turnover, and it’s payable on a quarterly basis. The due dates for filing turnover tax are 20th April, 20th July, 20th October, and 20th January of the following year for the respective quarters.
Preparing for Turnover Tax Filing
Before filing turnover tax, you need to ensure you have all the necessary documents and information. Here are some of the key things you’ll need:
- Business registration certificate
- VAT registration certificate (if applicable)
- PIN certificate
- Bank statements for the quarter
- Invoices and receipts for the quarter
- Calculation of gross turnover for the quarter
- Turnover tax payment voucher (if you’ve already made the payment)
It’s essential to keep accurate and up-to-date records to ensure you can accurately calculate your gross turnover and file your turnover tax correctly.
Filing Turnover Tax through iTax
The KRA has made it easy to file turnover tax through their online platform, iTax. Here’s a step-by-step guide on how to file turnover tax through iTax:
1. Log in to your iTax account and click on the “Returns” tab.
2. Select the “Turnover Tax” option and choose the quarter you want to file for.
3. Enter your gross turnover for the quarter and calculate the turnover tax payable.
4. Upload the necessary supporting documents, such as bank statements and invoices.
5. Review your return to ensure everything is accurate and complete.
6. Submit your return and wait for the KRA to process it.
Once you’ve submitted your return, you’ll receive an acknowledgement from the KRA. If you’ve made any errors, the KRA will notify you, and you’ll need to make the necessary corrections.
Making Turnover Tax Payments
After filing your turnover tax return, you’ll need to make the payment. You can make the payment through various channels, including:
- Direct bank deposit
- Mobile payment platforms (such as M-Pesa)
- KRA’s payment portal
When making the payment, ensure you quote your PIN and the payment reference number to avoid any delays or errors.
If you’re having trouble filing your turnover tax or making the payment, you can contact the KRA for assistance. They have various channels, including a contact center, email, and social media, where you can get help.
Filing turnover tax in Kenya doesn’t have to be complicated. By following these steps and keeping accurate records, you can ensure you comply with the KRA requirements and avoid any penalties or fines. Remember to file your turnover tax on time to avoid any late filing penalties.
In the next section, we’ll provide a summary of the key takeaways and a table outlining the key deadlines and requirements for filing turnover tax in Kenya.
Filing Turnover Tax in Kenya: A Step-by-Step Guide
Now that we’ve covered the importance of turnover tax in Kenya, let’s dive into the practicalities of filing it. The process can be complex, but with the right guidance, you’ll be able to navigate it with ease. Below, we’ve outlined the key steps to follow when filing turnover tax in Kenya.
| Step | Description | Required Documents | Deadline |
|---|---|---|---|
| 1. Register for Turnover Tax | Register with the Kenya Revenue Authority (KRA) to obtain a PIN and a turnover tax registration certificate. | KRA PIN, Business registration certificate, ID/Passport | Within 30 days of commencing business |
| 2. Calculate Turnover Tax | Calculate your turnover tax liability based on your business income. | Business income statements, invoices, and receipts | Monthly, by the 20th day of the following month |
| 3. File Turnover Tax Return | Submit your turnover tax return (Form TT1) to the KRA, either online or manually. | Completed Form TT1, supporting documents (e.g., invoices, receipts) | Monthly, by the 20th day of the following month |
| 4. Make Payment | Pay your turnover tax liability to the KRA using the generated payment slip. | Payment slip, proof of payment | Immediately after filing return |
Conclusion
Filing turnover tax in Kenya is a crucial obligation for businesses, and understanding the process is vital to avoid penalties and ensure compliance. By following the steps outlined in the table above, you’ll be well on your way to meeting your turnover tax obligations. Remember, it’s essential to keep accurate records and submit your returns on time to avoid any potential issues with the KRA.
At KopaCash, we’re committed to helping businesses like yours navigate the complexities of tax compliance. If you’re struggling to keep up with your turnover tax obligations, consider reaching out to our team of experts for guidance. Learn more about our tax compliance services and take the first step towards peace of mind – visit kopacash.com today!
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