During the 2018-2019 Kenya National Budget Forum, the Cabinet Secretary of the National Treasury proposed the introduction of the Presumptive Tax to replace the Turnover Tax (TOT) which was charged at 3%. The Finance Act of 2018 then replaced the provision of the Turnover Tax and replaced it with the Presumptive Tax. The Presumptive Tax is an effort toward the Kenyan Government’s objective of increasing its revenue collection and expanding its Tax base. This article will show you a step-by-step guide on how you can pay Presumptive tax in Kenya.
Related: How to File KRA Returns Online(Individual & Nil)
What is Presumptive Tax?
Presumptive Tax is a tax payable by a business that has an annual turnover falling below 5 million. Individuals that are mandated to Presumptive Tax are:
- Residents whose gross business turnover does not exceed Ksh. 5 million during a year of income and,
- Residents who are supposed to be issued with a business permit or trade license by a County Government.
Not all businesses with revenue below 5 million are to pay the Presumptive Tax, businesses that do not fall into the Presumptive Tax regime include:-
- Management and Professional Services.
- Rental Business.
- Incorporated Companies.
- A resident whose gross business turnover exceeds Ksh. 5 million in a year of income.
- A person whose income does not fall under the First Schedule of Income Tax Act and has a valid exemption certificate.
Related: How to Register on IFMIS as a Supplier in Kenya
How to Pay Presumptive Tax
1. Navigate to the iTax portal and log into your account using your KRA PIN and Password.
2. Click on the “Payment Menu” option then choose “Payment Registration.”
3. Select your preferred option as “Taxpayer” or “Agent.”
4. Next select “Tax Head” and select “Income Tax.”
5. Under “Tax Sub Head” select “Presumptive Tax.”
6. Select “Payment Type” as “Self-Assessment Tax.”
7. Choose “Payment Registration.” If you need to amend where you will do the payment, select the “Payment Amendment” option.
8. Fill in the relevant details such as the Year, the County, the Sub-County, Ward, Business License Registration Number, Business Name, Yearly Turnover, and Single Business Permit Payable Value.
9. Then Click Add button, the details you have filled in above will be auto-populated below.
10. The tax will be automatically calculated for you.
11. Choose your convenient “Mode of Payment” then click on the “Submit” button.
12. A payment slip will be generated whereby you have to click on “Click here to Download.” A copy of the payment slip will be sent to your registered primary email in iTax. Under the Payments Menu, Consult Payments, you can reprint the payment slip.
13. You can select “Payment Amendment”, choose the Payment Registration Number and delete or modify accordingly if you need to change any captured above details before making the payment.
14. KRA Mpesa Paybill Number is 572572 and the account number is Payment Registration Number, which is below the Payment Registration Date on the top right of the payment slip if you need to pay through Mobile Money.