Small and Medium Enterprises (SMEs) have begun the 2020
financial year surprised after the government re-introduced the turnover tax.
The Kenya Revenue Authority (KRA) strategizes to increase
the tax bracket and rise up to Kshs. 25 billion from the SMEs in less than six
months.
The three-percent-monthly tax on Gross sales targets small
businesses, who deals in intermediate and possibly capital goods, whose
turnover does not exceed Shs.5 million annually.
Economic analysts and SMEs have estimated that the turnover
tax is a “dead on arrival” owing to the fact that it flopped in 2018 due to
lack of proper records.
However, KRA is adamant that after trying out the
presumptive tax on SMEs, turnover tax will yield on proper record keeping.
News 9 Kenya takes you through simple steps, as a small
business holder, which will help you keep track of your financial records and
evade the tax man turnover tax penalty.
First, maintain cash books. Ensure your cash book records
are safe, secure and in order.
As you make sales, ensure your sales receipts and invoices –including
daily sales summary –are filed and kept in good order.
Make sure your purchase invoices are duplicated, kept and
filed in order.
Lastly, maintain your Bank slips and statements ensuring
that they kept in proper filing system.
Should a business fail to file turnover tax return on time,
KRA will impose a Sh5,000 penalty while late payment will be penalized at 5 per
cent of tax due and attract an interest of one per cent.
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