The Kenya Revenue Authority (KRA) has announced a major change for small-scale traders, requiring them to pay their Turnover Tax (TOT) daily instead of monthly.
KRA Commissioner for Micro and Small Taxpayers, George Obell, shared the update on Monday, March 2, 2026, explaining that the move aims to simplify tax payments and help business owners manage their cash flow more effectively.
The initiative aligns with KRA’s broader strategy to modernize tax collection from the informal sector, which has historically been difficult to monitor. By integrating payments into daily business operations, likely through mobile money platforms like M-Pesa, the authority hopes to make compliance seamless and convenient.
“Commissioner for Micro and Small Taxpayers George Obell has reaffirmed KRA’s commitment to supporting businesses through enhanced services, simplified tax solutions, and continuous public engagement,” KRA stated.
“He highlighted the introduction of daily Turnover Tax payments to ease cash flow for small businesses and promote timely compliance,” the authority added.
A New Approach for Small Traders
The daily payment system follows the establishment of the dedicated Micro and Small Taxpayers (MST) department in 2025. Under this plan, the traditional monthly 20th-day deadline will be phased out, allowing taxes to be settled automatically as sales occur.
Turnover Tax (TOT) is a simplified levy applied to a business’s total earnings before expenses such as rent, wages, or transport. It targets small and mid-sized enterprises with annual revenues between Ksh 1 million and Ksh 25 million.
Currently, TOT is set at a rate of 1.5% of gross sales, designed to keep the tax manageable for micro-traders. Businesses that fail to comply face a monthly penalty of Ksh 1,000.
Previously, traders had to calculate their monthly sales and remit a lump-sum tax by the 20th of the following month. For many, this created financial strain, as funds were often already tied up in stock, rent, or urgent expenses.
By introducing a daily payment model, the KRA aims to make tax compliance a small, integrated part of every transaction. This “pay-as-you-earn” approach ensures that taxes remain proportional to daily earnings, preventing large bills from accumulating at month’s end.
Promoting Fairness and Expanding the Tax Base
KRA expects the daily TOT system to encourage fairness and inclusivity across the informal sector. By reducing the burden and complexity of compliance, more micro-entrepreneurs are likely to participate voluntarily, expanding the national tax base and creating a stable environment for local businesses to grow.
“KRA remains focused on expanding the tax base, ensuring fairness, and fostering a collaborative environment that supports business growth and voluntary compliance,” the authority said.
The post KRA Introduces Daily Turnover Tax to Ease Payments for Small Traders appeared first on Bossnana.
