This article focuses on how to pay presumptive tax in Kenya. Presumptive tax is payable by a resident whose business turnover does not exceed Kshs 5 million during a year of income.
The due date for payment of presumptive tax shall be at the time of payment for the business permit or trade license or renewal of the same.
Persons Liable to Pay Presumptive Tax in Kenya
- Resident persons whose gross turnover from business does not exceed Kshs 5 million during a year of income.
- Persons who are issued or are liable to be issued with a business permit or trade license by a county government.
Exceptions
Presumptive tax will not apply to;
- A person whose income is exempt from tax under the First Schedule of Income Tax Act and has a valid exemption certificate.
- A person who would otherwise pay tax under this regime but elects by notice in writing to the KRA commissioner not to be subjected to the presumptive tax.
- A resident person whose gross turnover from business exceeds Kshs 5 million in a year of income.
- Any income derived from management and professional services, rental business or incorporated companies.
Rate for Presumptive Tax
- The rate of presumptive tax shall be amount equal to 15% of the amount payable for a business permit or trade license issued by a county government.
How to Pay Presumptive Tax in Kenya
- Log in to iTax.
- Click on Payment Registration.
- Select Presumptive Tax.
- Fill in the required details.
- Generate a Payment Registration Number (PRN) on iTax under Presumptive Tax Payment.
- Pay through Mpesa Paybill Number 572572 or any other partner bank. Use the Payment Registration Number as the account number.
Penalty for Late Payment of Presumptive Tax
- 5% of the tax due and a late payment interest of 1% per month as outlined in the Tax Procedures Act, 2015.
