Central Bank of Kenya (CBK) Governor Patrick Njoroge walked down the streets of Nairobi on Saturday to interact with small scale traders on how they were fairing after the implementation of the new presumptive tax.
In an effort to increase revenue collection, the Kenya Revenue Authority (KRA) introduced presumptive taxes which is added to traders’ business permits or license fees.
The tax which was previously at 3% took effect on January 1 and will be effected when traders seek renewal of their permits and licences.
According to KRA, at least 60% of Kenyans who engage in income generating activities do not pay taxes. The move is necessary as it nets in more traders who may be evading taxes.
Read: New Taxes To Affect Street Preachers, Mutura Sellers And Public Photography
The presumptive tax was introduced in the 2018-19 financial year budget statement to replace the turnover tax which was charged at 3%.
Payment for presumptive is made through the iTax platform by generating a payment registration number which is payable through mobile money transfer or at any KRA partner bank.
As of 2015, there were 8.1 million taxpayers in the Personal Identification Number database.
In 2018, only 3.2million filed their returns leading to a Ksh1.48 trillion tax collection in the year ending June 2018 against a target of Ksh1.65 trillion.
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