WHAT IS TURNOVER TAX (TOT)?
- Turnover tax is a form of income tax imposed under Section 12C of the Income Tax Act.
WHO SHOULD REGISTER FOR TURNOVER TAX?
- Turnover tax is payable by any resident person whose turnover from a business is more than Ksh 1,000,000 but does not exceed or is not expected to exceed Ksh 25,000,000 during any year of income.
- However, a person meeting the threshold may elect not to register for turnover tax, subject to issuing a notice to that effect in writing to the Commissioner.
WHO IS EXEMPT FROM TURNOVER TAX?
Turnover tax does not apply to:
- Rental income
- Management fees
- Professional fees
- Training fees
- Any income that is subject to final withholding tax
- Non-residents
WHAT IS THE RATE OF TAX FOR TURNOVER TAX?
- The rate of tax is 1.5% of the gross monthly sales.
WHEN IS THE DUE DATE FOR FILING AND PAYING TOT?
- The due date for submitting returns and paying the tax due is on or before the twentieth day of the month following the end of the tax period.
WHAT IS THE PENALTY FOR LATE PAYMENT AND LATE SUBMISSION OF RETURNS?
- The penalty for late filing of TOT returns is Ksh 1000 per month
- Penalty on late payment is 5% of the tax due and payable
- Interest on unpaid tax is 1% of the tax due.
