Do you need to calculate and know how much Turnover Tax your business is supposed to pay to KRA? Learn How To Calculate Turnover Tax In Kenya Using Turnover Tax Form.
If you own and run a business in Kenya that is eligible to be paying the monthly Turnover Tax on the gross sales for a given month, then knowing how to use the Turnover Tax Form to Calculate Turnover Tax is a must for every taxpayer and business owner in Kenya. Before you get to the nitty gritty of the Turnover Tax Calculations, you need to Register for Turnover Tax using Cyber.co.ke Portal, then start paying for the KRA Turnover Tax each and every month.
In this article, I am going to share with you the step by step guide on How To Calculate Turnover Tax In Kenya Using Turnover Tax Form. By the end of this article, as a business owner in Kenya you will have learnt and known How To Calculate Turnover Tax by using the Turnover Tax Form.
No need to use the Turnover Tax Calculators which are normally not recommended by KRA but rather download the Turnover Tax Returns Form and use it to Calculate Turnover Tax for your business.
There are many sites out there in Kenya purporting to have the Turnover Tax Calculator, but I don’t recommend using those third party sites to Calculate Turnover Tax. The Kenya Revenue Authority (KRA) recommends that taxpayers Download the Turnover Tax Form from their iTax Web Portal Account and use the Turnover Tax Form to Calculate Turnover Tax Due for any given month.
We shall be addressing key concepts and terms related and pertaining to calculation of Turnover Tax including: What Is Turnover Tax Calculation, What Is Turnover Tax Form, Do I Need To Use Turnover Tax Calculators, Importance Of Turnover Tax Form For Turnover Tax Calculation, Requirements Needed To Calculate Turnover Tax and How To Calculate Turnover Tax In Kenya Using Turnover Tax Form.
What Is Turnover Tax Calculation?
Turnover Tax Calculation is the process of calculating the amount of Turnover Tax that a business which is eligible for Turnover Tax is supposed to file and pay to Kenya Revenue Authority (KRA) at the rate of 3% of the business gross monthly sales for a given month. All business owners are supposed to Calculate Turnover Tax, File Turnover Tax Returns and Pay the Turnover Tax each month to KRA.
As a process, Turnover Tax Calculation requires that the business owner or taxpayer keep the records for the gross monthly sales for their business as you are going to need the gross monthly sales for a given month e.g. February 2020 to file and pay the Turnover Tax after calculating the Turnover Tax using the Turnover Tax Form on or before the 20th day of the next month e.g. March 2020.
Taxpayers are normally recommended to download the Turnover Tax Form which is the key requirement that is needed in the process of How To Calculate Turnover Tax in Kenya on a monthly basis. Also, once the taxpayer or business owner has calculated the Turnover Tax due and validated the Turnover Tax Returns Form, he or she is supposed to upload the Turnover Tax Returns form that has the computed Turnover Tax amount due to KRA on their KRA iTax Web Portal accounts.
Since this article will be focusing on How To Calculate Turnover Tax using Turnover Tax Form, we need to understand what we mean by the term Turnover Tax Form. I shall be highlighting briefly about the Turnover Tax Returns form because I have already a full article about KRA Turnover Tax Returns Form here at Cyber.co.ke Portal Blog titled “How To Download Turnover Tax Form Using KRA iTax Portal.”
What Is Turnover Tax Form?
Just to recap, the Turnover Tax Form is an Excel Sheet or Form that is used to compute and validate the amount of Turnover Tax for a given month that a business is supposed to pay Kenya Revenue Authority (KRA). It is also referred to as the Income Tax Turnover Tax Returns Form. Just like any other form on the iTax Portal, the taxpayer is supposed to fill in the details of gross sales in the KRA Turnover Tax Returns Form so as to calculate the Turnover Tax that is due to KRA for that given month.
Once the business has been registered for the Turnover Tax Obligation on iTax Portal, the business is supposed to file monthly Turnover Tax Returns on KRA iTax Portal. For that business to be able to file the Turnover Tax Returns, the taxpayer has to log in to their KRA Web Portal Account and download the Turnover Tax Form, fill the Turnover Tax Returns Form, validate the KRA Turnover Tax Form and upload the KRA Income Tax Turnover Tax Form on iTax Portal.
Since the Turnover Tax Form is an excel workbook, the taxpayer has to ensure that thay have MS Excel installed in their Laptops or Computers so as to be able to open and fill in the Turnover Tax Form before uploading it to their iTax Account to complete the Turnover Tax Returns Filing process on KRA iTax Portal. So, you need the KRA Turnover Tax Form inorder to calculate the Turnover Tax for your business in Kenya before uploading, filing and paying your business Turnover Tax to Kenya Revenue Authority (KRA).
Do I Need To Use Turnover Tax Calculator(s)?
I normally get asked by many taxpayers on a day to day basis on whether they need to use any Turnover Tax Calculator to calculate the amount of Turnover Tax that their business needs to pay to Kenya Revenue Authority (KRA). Well, my answer is basically a big NO. Why? All those Turnover Tax Calculator(s) out there are just a rip off of the Turnover Tax Returns Form. I normally recommend that you download the Turnover Tax Form that you need to use to calculate the Turnover Tax for your business.
So, there is no need to use those online Turnover Tax Calculators as the Turnover Tax Form is the recommended form that all taxpayers and business owners need to use to calculate their Turnover Tax after which they validate the Turnover Tax Returns form and upload the form in their KRA Web Portal Accounts. So, just download the KRA Turnover Tax Form that will serve you better than any other Turnover Tax Calculator out there.
Having looked at the Turnover Tax Calculator above, we now need to look at the Importance of the Turnover Tax Form that is used to Calculate the Turnover Tax on iTax Portal in Kenya.
Importance Of Turnover Tax Form For Turnover Tax Calculation
Turnover Tax Returns Form plays an important role in helping the taxpayer who owns and runs a business in Kenya to calculate the amount of Turnover Tax that is due to be paid to Kenya Revenue Authority (KRA). I don’t think if there is any other important use of the Income Tax Turnover Tax Returns Form other than the KRA Turnover Tax Returns Filing.
So, the KRA Turnover Tax Form is simply used to compute the TOT that the business has to pay to KRA for a given month. Since Turnover Tax is paid monthly, then the taxpayer needs to always have the latest version of the KRA Turnover Tax Returns Form on iTax Portal. Once downloaded, then the taxpayer can use the TOT Form to calculate the tax dues from the gross monthly sale of the business for a given month.
So, from the above you can note that the Turnover Tax Form serves also as a Turnover Tax Calculator that all taxpayers and business owners in Kenya need to use to calculate the amount of Turnover Tax that their businesses need to pay to Kenya Revenue Authority (KRA). We now need to change gears and look at Requirements Needed To Calculate Turnover Tax.
Requirements Needed To Calculate Turnover Tax
To be able to calculate the Turnover Tax for your business for a given month, you need to have with you some three key requirements i.e. KRA PIN Number, Turnover Tax Form and Total Gross Sales For The Month.
KRA PIN Number
KRA PIN Number is the most important requirement that you need to have with you. If by any chance you have forgotten or you don’t remember your KRA PIN, you can submit KRA PIN Retrieval order online here at Cyber.co.ke Portal and our team of experts will be able to assist with with PIN Retrieval request.
At the same time, if you are looking for a new KRA PIN, you can get it here in 3 minutes by submitting your KRA PIN Registration order today at Cyber.co.ke Portal. Your KRA PIN Certificate will be sent to your Email Address once the Request for PIN Registration has been done and processed from our Support team.
Turnover Tax Form
Next, you are going to need the Turnover Tax Form which serves as the Turnover Tax Calculator that taxpayers need to use to calculate the amount of Turnover Tax due. You can check our article on How To Download Turnover Tax Form Using KRA iTax Portal so as to know how to download the Turnover Tax Returns Form on iTax Portal.
With the Turnover Tax Form you don’t need to use any other Turnover Tax Calculator as once you have calculated the amount of Turnover Tax due, all you need to do next is to validate and upload the Turnover Tax Returns Form in your KRA Web Portal account.
Total Gross Sales For The Month
Last but definitely not the least requirement is the Total Gross Sales For The Month. This amount is very important in the process of How To Calculate Turnover Tax for your Business in Kenya. Every business in Kenya that is eligible for Turnover Tax is supposed to keep their monthly gross sales as it is needed to calculate the amount of Turnover Tax that the business is supposed to pay to Kenya Revenue Authority (KRA).
So, always keep a records of your business gross sales for each month since the KRA Turnover Tax is filed on a monthly basis on or before the 20th day of the next moth. Failure to file your business Turnover Tax Returns attracts a penalty for late filing. So, ensure that you have your monthly gross sales with you in order to calculate, file and pay the KRA Turnover Tax on a monthly basis.
Having addressed all the above pertaining to How to Calculate Turnover Tax above using the Turnover Tax Form, we need now to start and look at the Turnover Tax Calculations i.e. How To Calculate Turnover Tax In Kenya Using Turnover Tax Form.
How To Calculate Turnover Tax In Kenya Using Turnover Tax Form
Step 1: Download the Turnover Tax Form
First and foremost, you need to download the KRA Turnover Tax Returns Form that is going to serve as the Turnover Tax Calculator. You can check our article on How To Download Turnover Tax Form or click on the link below titled Turnover Tax Form to download the latest Turnover Tax Returns Form for 2020.
Next, you will need to fill in the Section A with your KRA PIN Number, Type of Return, Return Period From and Return Period To. Once you have filled in the above details, you will now move to the next step where you need to Calculate Turnover Tax using the KRA Turnover Tax Returns Form.
Step 3: Calculate The Turnover Tax
In this step, you are now going to calculate the amount of Turnover Tax that is due from your business gross sales to the Kenya Revenue Authority (KRA). You are going to need the Gross Sales for the previous month i.e. February 2020 so as to use the Turnover Tax Form to calculate Turnover Tax.
As an example, assuming we own a small business whose total gross sales for the month of February 2020 was Kshs. 90,000.00, we shall use the gross sales so as to Calculate Turnover Tax that is due to KRA for the month of February 2020. This is as shown below.
From the above Turnover Tax Calculation, you will notice that it is calculated at the rate of 3% of the monthly gross sales. The amount of Turnover Tax paid by various businesses in Kenya is different as each make different gross sales per month but all have to calculate Turnover Tax using the Turnover Tax Form that serves as the Turnover Tax Calculator. Once you have calculated the Turnover Tax above, all you need to do next is to click on the “Validate” button and upload the Turnover Tax Form in your KRA iTax Web Portal Account.
The above sums up the steps that every taxpayer who owns and runs a business that is eligible for Turnover Tax should follow on How To Calculate Turnover Tax In Kenya Using Turnover Tax Form. All you need to know is that the Turnover Tax Returns Form serves as the Turnover Tax Calculator that you need to use to calculate the amount of Turnover Tax due. If you need to Register for Turnover Tax, you can submit your order online for Turnover Tax Registration and also KRA Turnover Tax Returns Filing.
Matthews Ohotto is a highly accomplished individual who holds a Bachelor of Business Information Technology (BBIT) degree with Second Class Honours Upper Division from Jomo Kenyatta University of Agriculture and Technology (JKUAT). He is the Founder of CYBER.CO.KE Portaland the Content Editor at CYBER.CO.KE Blog.
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