Tax guide · Kenya
If you run a small business in Kenya, Turnover Tax (TOT) can be one of the simplest ways to stay compliant with KRA. At Spondoo Kenya, we help businesses understand what they need to pay, when they need to pay it, and how to avoid unnecessary penalties.
Turnover Tax (TOT) is charged at 1% of gross sales and applies to businesses with annual turnover of more than KES 1 million but not more than KES 25 million.
Because TOT is based on sales rather than profit, it is straightforward to calculate — though it does not always suit every type of business equally.
Turnover Tax is filed and paid monthly through the KRA iTax portal. The deadline is the 20th day of the following month — so January's sales are due by 20 February, and so on.
TOT is not automatically the best option for every small business. Whether it suits you depends largely on your profit margins.
For businesses with strong profit margins, TOT can be attractive. The rate is low and the calculation is simple — if your business keeps a healthy margin on each sale, paying 1% of turnover is manageable and efficient.
For businesses with high turnover but low profit margins, TOT can feel more expensive. That is because the tax is charged on gross sales, not actual profit. So even where costs are high and profits are tight, the tax is still due.
If you are unsure which regime — TOT, instalment tax, or another arrangement — fits your business best, getting tailored advice before you register is time and money well spent.
At Spondoo.ke, we help Kenyan businesses understand whether Turnover Tax is the right fit, stay on top of filing deadlines, and keep tax records organised. Getting the right advice early can save time, money, and stress.