Turnover Tax (ToT) is a simplified tax designed for small and medium-sized businesses in Kenya. Instead of calculating tax on profits, it is calculated as a flat percentage of the gross monthly sales.

Any resident person or business whose annual turnover (gross sales) is between KSh 1,000,000 and KSh 25,000,000 is required to register for ToT.

The current Turnover Tax rate is 3% of the gross monthly sales.

ToT is an income tax based on your total sales. VAT is a consumption tax charged on the sale of goods and services. If your turnover is above KSh 5 million, you must register for both ToT and VAT.

No. Turnover Tax is calculated on the gross sales amount. Business expenses are not deductible under the ToT regime. Our "ToT vs. Standard Tax" simulator can help you see if this is the best option for you.

The deadline for filing the ToT return and paying the tax due is on or before the 20th day of the month following the month in which the sales were made.

If your annual turnover exceeds KSh 25 million, you are no longer eligible for ToT. You must de-register from ToT and register for the standard corporate or individual income tax regime, where tax is calculated on profits.

Yes, if your annual turnover falls below the KSh 1 million threshold, you can apply to KRA to de-register from ToT. You may then be eligible for Presumptive Tax.

You should maintain a daily record of your gross sales. While you don't need to declare expenses for ToT, it is good business practice to keep records of all your purchases and operating costs.

Yes. The penalty for late filing of a ToT return is KSh 1,000 per month. The penalty for late payment is 5% of the tax due, plus a late payment interest of 1% per month on the unpaid tax.