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Turnover tax guide for small traders

How turnover tax works for small traders: who qualifies, the rate, how to register, file and pay, with a worked example.

Turnover tax guide for small traders template

Turnover tax is a simple tax on gross sales for small businesses. This guide explains who can use it, how the rate is applied to gross receipts, what you cannot claim, how to register on iTax, how to file and pay every month, how it compares with VAT and annual income tax, and how to keep simple records.

Shopkeepers, hawkers, salons, mama mbogas, small contractors and other small traders, and the people who keep their books.

What is included

  • Who qualifies and who does not
  • How the tax is calculated, with an example
  • Registration, filing and payment steps
  • Comparison with VAT and income tax
  • A simple sales record sheet

Screenshots

  • Title page of Turnover tax guide for small traders
  • A page inside of Turnover tax guide for small traders

How to use it

  1. Check whether your annual sales fall within the turnover tax range.
  2. Register for the obligation on iTax.
  3. Record every sale and work out the tax each month.
  4. File and pay by the 20th of the next month.

Templates are tools to help with your own records. They are not tax or legal advice. Check the figures against official sources before filing or paying.

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What the turnover tax guide for small traders gives you

Turnover tax is a simple tax on gross sales for small businesses. This guide explains who can use it, how the rate is applied to gross receipts, what you cannot claim, how to register on iTax, how to file and pay every month, how it compares with VAT and annual income tax, and how to keep simple records.

Who it is for

Shopkeepers, hawkers, salons, mama mbogas, small contractors and other small traders, and the people who keep their books.

How to use it

  1. Check whether your annual sales fall within the turnover tax range.
  2. Register for the obligation on iTax.
  3. Record every sale and work out the tax each month.
  4. File and pay by the 20th of the next month.
  5. Keep a signed or dated copy with your records, so you can show what was agreed or done.

What is inside

  • Who qualifies and who does not
  • How the tax is calculated, with an example
  • Registration, filing and payment steps
  • Comparison with VAT and income tax
  • A simple sales record sheet

The document is a ready-to-print PDF with these parts: Who it is for, How it is worked out, Registering, filing and paying, How it compares, Simple sales record. It is laid out for A4, with the headings, tables and tick boxes already in place, so you can print it and fill it in by hand, or type into it with a PDF editor.

Tips for getting it right

  • Record every sale, including M-Pesa receipts.
  • Pay on time even when sales are low.
  • Review each year whether turnover tax is still the best option.
  • Move to VAT when your sales pass the threshold.

Why it helps

Most tax trouble comes from late or missing records rather than from the tax itself. When the figures are collected as they happen, preparing a return becomes a matter of copying totals, not of searching for receipts. A workbook that follows the same layout as the return also makes it easier to spot a number that looks wrong before KRA does, and to explain it if asked.

Questions people ask

Can I edit it? It is a PDF, so it is meant to be printed and completed, or filled with a PDF editor. If you want to change the wording, copy the text into Word or Google Docs and adapt it to your business.

Is it legal advice? No. It is a practical starting point written for Kenya. Rules change, so check the current position and ask a professional where the stakes are high.

Will it work on my phone? Yes for reading. For filling in and printing, a computer or a PDF app works best.

Keeping it safe and up to date

Tax figures change with each Finance Act, so check the Rates sheet against KRA's current guidance before you file. Keep the supporting documents with the workbook, and keep each year's copy for at least five years in case KRA asks for proof.

Read the KRA filing calendar for small businesses for the wider picture. Free calculators that go with it: Turnover tax calculator, Vat registration checker. See more tax templates or ask us for a custom one.

This document is general information, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

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