Traders operating small and mid-sized businesses will from today start paying a 3 percent tax on their sales to the Kenya Revenue Authority following the re-introduction of the levy, which looks set to hurt enterprises struggling with low revenues. 

The sales revenue tax is different from the normal VAT and excise duty. According to KRA, informal (Jua Kali ) sector is the sector as one the largest pool to increase tax collection.

Normal business will now be paying for county levies, license, VAT on ETR and 3 percent on the revenue collected annually.

The Finance Act 2019, which President Uhuru Kenyatta signed into law on November 7, reintroduced the turnover tax for businesses whose annual sales are below Sh5 million to boost tax collections.

The new tax takes effect today and is expected to saddle small traders, who have raised concerns about deteriorating business conditions, with additional operating costs.

It is also expected to provide the KRA, under pressure to collect additional revenue, with a fresh avenue for raising taxes from small traders, the majority of whom have not been paying State levies.

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