Kenya is going all-in in the taxation of online-based businesses according to a new digital Tax proposition by Kenya Revenue Authority (KRA). This includes everything making cash from the internet.
The introduction of this taxes to the online businesses will mean that some services like the Uber, Netflix and also online shopping websites get to pay their taxes in order for their businesses to run successfully in the country. This does not leave behind the online book stores that deliver books to their users and also online gaming and streaming of music online.
The informal sector is also included from e-learning services, sale of events tickets, search-engine and automated help desk services and other various supply channels of digital content.
Citing VAT Act 2013, the firm, at the time, said online sellers have an obligation to charge and remit taxes not only on all sales made online but also on commission charged to the vendors for the use of their digital platforms to transact.The tax collector has been missing on its revenue collection targets continuously in the recent past and the current push to tax the digital marketplace might help save on some of those predicted revenue misses.
Digital businesses will also have to adhere to the taxman’s prescribed timelines as to when the taxes should be remitted. Failure to which will attract penalties and worst of all restrictions to the digital marketplace.