Turnover Tax vs VAT: Which Applies to Your SME?

Many small businesses are unsure whether they should be registered for VAT, paying Turnover Tax, or both. The answer depends on your annual turnover.

Turnover Tax (TOT) TOT applies to businesses whose turnover falls within the KRA's prescribed band. It is a simple percentage of gross sales, filed monthly, and is designed to keep compliance light for smaller traders.

VAT Once your turnover crosses the VAT registration threshold, you must register for VAT, charge it on taxable supplies and file monthly returns — with eTIMS invoices supporting every transaction.

Getting it right Registering for the wrong regime, or failing to move from TOT to VAT when you cross the threshold, creates compliance risk. We assess your position and register you correctly.