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[PHOTOS] CBK governor visits mitumba, small traders affected by new presumptive tax



CBK governor Patrick Njoroge took to the streets in Nairobi on Saturday as he sought to find out how micro and small business owners were fairing.

Under the theme ‘CBK Open office’ Njoroge interacted with traders who shared their challenges operating and issues they would want addressed to improve business prospects.

From January 1, micro and small business owners with a turnover of Sh5 million or less per year have to pay a presumptive tax of 15 per cent of the cost of their trading licences when seeking renewals.

The tax was introduced in a bid to net in more business owners, especially those in the informal sector who may evade tax.


CBK governor Patrick Njoroge talks to a trader in Nairobi. /COURTESY

According to the Kenya Revenue Authority, at least 60 per cent of Kenyans engaged income generating activities do not pay tax.

In a country of 45 million with more than 20 million taxpayers engaged in income generating activities, less than 10 million are registered taxpayers.

As at 2015, there were 8.1 million taxpayers in the Personal Identification Number database.

CBK governor Patrick Njoroge talks to a trader in Nairobi. /COURTESY

Last year, only 3.2million filed their returns leading to a a Sh1.48 trillion tax collection or an average Sh123.93 billion a month in the year ending June 2018 against a target of Sh1.65 trillion.

The presumptive tax was introduced in the 2018-19 financial year budget statement to replace the turnover tax which is charged at three per cent.

Read: KRA gets tough, presumptive tax to be slapped on trade fees

Also Read: New tax raises SME overheads

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