- KRA has recently launched a new mobile application, the KRA Mservice App to make it more convenient for business owners to file and pay their taxes.
- Users can apply for a PIN, verify their PINs or Tax Compliance Certificates (TCC), add a property for those with rental income, register for Turnover Tax, amongst others.
For business owners, filing and paying your taxes has not always been easy.
First, it is important to note all businesses are mandated by law to keep a record of their business transactions in any year they have income.
KRA has over the last few years made significant strides in transforming its processes and adapting technology to facilitate taxpayers and enhance tax compliance.
KRA has recently launched a new mobile application, the KRA Mservice App, to make it more convenient for business owners to file and pay their taxes. On the application, users can apply for a PIN, verify their PINs or Tax Compliance Certificates (TCC), add a property for those with rental income, register for Turnover Tax, amongst others
Turnover Tax (TOT) is charged on gross sales of business under Section 12 (C) of the Income Tax Act. It is payable by any resident whose turnover from the business is more than Sh1 million and does not exceed or is not expected to exceed Sh50 million during any year of income.
Turnover Tax is charged at the rate of 1 per cent on gross sales. The due date for filing and paying TOT is on or before the 20th of every month.
For landlords and property owners, the Monthly Rental Income (MRI) tax is applicable to those with rental income earned for the use or occupation of a residential property where the rent income is between Sh144,000 (Sh12,000 per month) and Sh10 million per annum.
In January 2021, however, the upper threshold will increase to Sh15 million per annum as per the changes captured in the Finance Act 2020. The due date for filing and paying of Monthly Rental Income (MRI) is on or before the 20th of every month.
The application is currently only available on Google Play Store for Android phones.
How to use KRA MService to file and pay your Turnover Tax
- Go to the MService App
- Log in using your MService app credentials (not iTax), register if you are a first-time user of the app
- On the app, home menu select Tax returns
- Select Turnover
- Fill in the details, month and monthly sales.
- Confirm details
- E-Slip is generated, confirm the amount and then select pay now
- You will receive an M-Ppesa prompt for payment, Enter your M-Pesa pin
- You will receive a message from KRA informing you that payment has been received
(Edited by V. Graham)