If a business is making taxable supplies, the value of these supplies is called taxable turnover. All goods are taxable except those listed in the second schedule of VAT Act as exempt.
Taxable services are listed in the third schedule of VAT Act. All other services are exempt. If a business supplies taxable goods or services and the turnover is above Sh.3 million p.a. then the person is taxable and should register for VAT. The above limits are not applicable if:
- One is a supplier of designated jewellery
- One is a supplier of pre-recorded cassettes
- One is a saw miller
- One sells 4 or more motor vehicles in a year.
- One is a supplier of accountancy services
- One is an auctioneer
- One is a lawyer
- One is a supplier of motor vehicle spare parts accessories and electrical appliances.
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