As many Kenyans sought to market their wares online, the Kenya Revenue Authority has advised enterprising Kenyans working online to pay their taxes accordingly — By Gerald Gekara.
The policy that takes effect from January 2021, will remit 1.5% Digital Tax on its goods and services.
As such, Treasury now requires digital businesses to register with the taxman and pay the taxes on marketplaces such as eCommerce, online subscriptions, and other digital services that have been escaping KRA’s tax radar from January 1, 2021.
Digital marketplaces set to be affected by these new regulations include those involved in and not limited to:
- Mobile applications, e-books, and movies
- News, magazines, journals, TV and music streaming sites, podcasts, and online gaming
- Software, drivers, website filters, and firewalls;
- Website hosting, online data warehousing, file-sharing, and cloud storage services;
- Supply of music, films, and games;
- Supply of search-engine and automated helpdesk services including supply of customised search-engine services;
- Tickets bought for live events, theatres, restaurants etc. purchased through the Internet;
- e-learning, including supply of online courses and training;
- Supply of digital content for listening, viewing or playing on any audio, visual, or digital media;
- Supply of services on online marketplaces that link the supplier to the recipient, including transport hailing platforms;
How To pay Digital Tax
For goods sold on digital or social media platforms the suppliers are required to declare the income earned under the self-assessment regime provided under the relevant Tax Laws.
Collection of digital tax will rely heavily on self-assessment with players in the digital space required to register with the tax authority.
