Kenya, Uganda in Plans to Pull Informal Sector Into Tax Bracket
Tuesday, June 21, 2016
In 2008, Kenya implemented the turnover tax, applicable to any business whose turnover is between $5,000 and $50,000 during the year of operation.
The turnover tax was passed in the Finance Act 2006, and the rate charged is 3 per cent. Businesses taxed under this Act are expected to maintain cashbooks, sales receipts and invoices, daily sales summaries, purchase invoices and bank statements. The penalty for failing to file returns by the due date is $20.
Through the Finance Bill 2016, Treasury Secretary Henry Rotich amended a section of the Tax Procedures Act, laying the ground for the Kenya Revenue Authority to collect information in advance from selected taxpayers for purposes of pre-populating the information in Kenya’s iTax system.
KRA can now liaise with telecommunication firms like Safaricom, which operate mobile money platforms and banks, to act as the appointed collection agents. However, Safaricom has rejected KRA’s request to access its customers’ mobile money records.