KRA shifts small trader tax to daily pay

Daily Turnover Tax just landed on Kenya's small traders, flipping the old monthly lump-sum model into a transaction-by-transaction grind.

KRA's new daily TOT system

• George Obell confirmed the shift on March 2, 2026.
• The monthly 20th-day cutoff gets phased out entirely.
• Payments will likely ride on M-Pesa rails.
• KRA's MST department, built in 2025, runs it.

How Turnover Tax actually works

• TOT hits 1.5% of gross sales before expenses.
• Businesses pulling Ksh 1-25 million annually qualify.
• Noncompliant traders eat a Ksh 1,000 monthly fine.
• The old setup forced a lump-sum remittance each month.

Why traders struggled before

• Cash was already locked in stock or rent.
• One big monthly bill stacked up financial pressure.
• Informal-sector monitoring proved consistently tough for KRA.

What KRA expects from the overhaul

• Micro-entrepreneurs should find the voluntary sign-up easier.
• Tax obligations stay proportional to each day's revenue.
• KRA wants a broader, more inclusive tax base.
• Compliance becomes a baked-in part of every sale.