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Kenya Revenue Authority (KRA) is targeting the small and medium sized enterprises to raise the number of active taxpayers to 4 million by 2018 from the current 1.6 million active taxpayers.
KRA plans to revamp the turnover tax strategy to focus on recruitment of SMEs. They will be engaging small and medium entrepreneurs with a view to improving their tax compliance. KRA will offer a broad range of services, including registering SMEs and assisting them file their returns.
Turnover tax was introduced in 2007 in respect of businesses with a turnover of more than 500,000 shillings and less than 5 million shillings per annum. It is applicable at a rate of 3% on gross sales
According to Commissioner General, John Njiraini, many small and medium businesses’ do not register voluntarily, while those who do register often fail to keep adequate records, file tax returns, and settle their tax liabilities promptly.
The authority announced plans to work closely with Counties to incorporate Personal Identification Number (PIN) to business licensing at the Counties, expanding the scope of services and activities for which PIN is a requirement and adopting a business classification, structure and tax rates similar to those being applied by the Counties. Currently, there are 8.1 million people in the PIN database.
