This 2025 guide explains how to file Turnover Tax (TOT) in Kenya step-by-step. Learn the current rate, who qualifies, deadlines, penalties, and how to file on iTax using KRA’s official process.
📘 What Is Turnover Tax (TOT)?
Turnover Tax (TOT) is a simplified tax for small businesses in Kenya, charged on their gross sales, not profit.
TOT is governed by Section 12C of the Income Tax Act (as amended) and further clarified in the Finance Act 2025.
✅ Who Should Pay Turnover Tax?
As of 2025, you must register for and pay TOT if:
| ✅ You… | ❌ But You Don’t… |
|---|---|
| Run a business with annual gross sales between Ksh 1 million and Ksh 25 million | Earn less than Ksh 1 million per year |
| Sell taxable goods/services (retail, transport, salons, etc.) | Work in professional services, rental income, management/consultancy |
| Are not already VAT-registered | Are already under corporate/income tax regimes |
📌 TOT does not apply to:
- Limited companies
- Rental income
- Income subject to withholding tax
- Farming income
- Employment income
- Professionals (lawyers, accountants, doctors, etc.)
🧾 Legal Reference: Income Tax Act, Section 12C + Finance Act 2025
💰 TOT Tax Rate in 2025
TOT is charged at 1% of your gross turnover, and:
- No deductions are allowed (even for expenses)
- Tax is final (you don’t need to file a full income tax return unless you have other income sources)
Example:
If you earned Ksh 120,000 in a month, your TOT is Ksh 1,200
📅 TOT Filing and Payment Deadlines
You must:
- File your TOT return monthly via iTax
- Pay by the 20th of the following month
January sales → File and pay by 20th February
February sales → File and pay by 20th March
⚠️ Penalties for Late Filing or Payment
| Type | Penalty |
|---|---|
| Late Return | Ksh 1,000 per month (individuals) or Ksh 5,000 (companies) |
| Late Payment | 5% of the tax due + 1% interest per month until paid |
🛠️ How to File TOT on iTax (Step-by-Step)
According to KRA’s official User Guide for TOT :
Step 1: Log In to iTax
- Go to https://itax.kra.go.ke
- Enter your PIN and password
Step 2: Navigate to “Returns”
- Click File Return → Select tax obligation as “Turnover Tax – Income Tax”
Step 3: Enter Return Details
- Select the tax period
- Enter the gross sales (turnover) for that month
- The system will auto-calculate the 1% tax due
Step 4: Submit Return
- Confirm entries → Submit
- Download your Acknowledgement Receipt (e-Return)
Step 5: Make Payment
- Generate a Payment Slip (PRN)
- Pay via bank, M-Pesa Paybill 572572, or online banking using the PRN
🧾 Documents You’ll Need
| Document | Purpose |
|---|---|
| Sales Records | To track and declare accurate gross turnover |
| KRA PIN | iTax login |
| Bank or M-Pesa Statement | Payment proof and income validation if audited |
💬 Frequently Asked Questions
Q: I earned Ksh 800,000 in 2024 but Ksh 1.2M in 2025. Do I register for TOT now?
✅ Yes. Once your annual turnover crosses Ksh 1M, registration is mandatory.
Q: Can I register for VAT and pay TOT?
❌ No. If you’re registered for VAT, you cannot pay TOT.
Q: Is TOT tax final? Do I need to file an annual return?
✅ TOT is final for turnover income — but you must file a separate return if you earn income from employment, rent, or other sources.
Q: Can I claim expenses under TOT?
❌ No. TOT is on gross income — no expenses or input VAT is claimable.
📣 Call to Action
TOT is simple, but penalties can pile up fast.
💼 If you’re running a small business earning Ksh 1M+ per year — file and pay monthly to stay compliant.
💬 Need help filing TOT or confirming your eligibility? Ushuru.com is here to assist!