Turn Over Tax (TOT) is a tax charged on business income which does not exceed sh5,000,000 per year.
It was re-introduced by the Finance Act, 2019 to take effect from 1st January 2020.
The tax rate is 3 per cent on the gross sales/ turnover and is a final tax. No expenses are allowed under TOT.
It is filed and paid on a monthly basis and payers are also liable to pay presumptive tax.
However presumptive tax paid is offset against the TOT payable.
There are however exemptions, but which must be approved by the taxman. Incomes exempt from TOT include Persons registered for Value Added Tax (VAT), Employment Income, Rental Income, Limited Liability Companies, Management and Professional Services among others. Taxpayers who are eligible for Turnover Tax may opt not to be under the provisions of this tax by writing to the Commissioner of Domestic Taxes.
TOT returns are filed on or before 20th of the following month, same way VAT are to be filed by that date. For example, turnover tax for January 2020 is payable on or before 20th of February 2020.
To file, TOT, logon to itax, select file TOT return under the returns menu, complete the return and submit.
After filing the return, go to the payment menu, select payment, and declare the amount filed, and generate the payment slip. Follow the steps in the payment slip to make the payment.
TOT late filing penalty is sh5,000 per month.
Late payment penalty is 5 per cent of the tax due while the interest on unpaid tax is 1 per cent of the tax due.