One of the biggest challenges that tax administration developing countries face is cracking the nut that is the informal sector. Despite the vibrancy of the informal sector, the struggle to tap revenue from the sector has been real. The first shot towards taxing the informal sector was in 2007 when the Kenya Revenue Authority introduced turnover tax (ToT). To further streamline tax administration in the ever-growing sector, the government early in 2019 introduced another tax, presumptive tax, which effectively replaced ToT. Where a business venture qualifies for both turnover and presumptive tax, the presumptive tax paid will be used to reduce the turnover tax liability, effectively avoiding a double taxation scenario.

Source: The Star December 31, 2019 21:00 UTC