Small traders will now be paying Turnover Tax every day instead of waiting until the end of the month.
The Kenya Revenue Authority (KRA) announced the change on Monday, March 2, saying it wants to make tax payment easier for micro and small businesses.
Turnover Tax applies to businesses making between Ksh1 million and Ksh25 million a year. It is charged at 15 per cent of total sales before expenses like rent, transport or salaries are deducted. If someone delays payment, they face a penalty of Ksh1,000 per month.
Previously, traders had to calculate all their sales at the end of the month and pay the tax in one lump sum. For many small business owners, especially those running shops and small service businesses, that was not easy.
By month end, most of the money had already gone back into buying stock, paying workers or settling bills. Getting a big amount at once for tax often felt heavy.
With the new system, traders can now pay small amounts daily based on what they make that day. Instead of struggling to raise one large figure at the end of the month, they will be remitting bit by bit.
KRA says the move is meant to help small businesses manage their cash flow better and also improve tax compliance.
For many biashara owners, what will matter most is how simple and practical the new system will be on the ground.
