Why KRA Compliance is Crucial for SMEs

For many small business owners in Kenya, tax compliance feels like a burden. Between managing stock, employees, and customers, filing returns often takes a backseat. However, ignoring KRA compliance is a risk that can sink an otherwise profitable business.

The Cost of Non-Compliance

The Kenya Revenue Authority (KRA) has digitized its systems via iTax and is actively using data to identify non-compliant businesses. The penalties are steep:

• Failure to file returns: KSh 2,000 or 5% of tax due (whichever is higher) for monthly returns.
• Late payment interest: 1% per month on the unpaid tax.
• Loss of TCC: Without a Tax Compliance Certificate, you cannot apply for government tenders or bank loans.

It’s About Growth, Not Just Taxes

Compliance isn't just about avoiding fines; it's about positioning your business for growth. Corporate clients and suppliers often require proof of compliance before doing business. If you want to scale, your books need to be clean.

By automating your sales tracking, you remove the guesswork. You know exactly what you sold, what is taxable, and what isn't, ensuring you never overpay or underpay your taxes.