KRA Set To Start Taxing Kenyans For Downloading Apps

Kenya is a country of wonders. The poor will always be poor and the rich will continue being rich. The poor will continue funding the lifestyles of the rich by paying taxes through the nose and the rich shall continue moving around without paying taxes.

As the country continues to battle Covid-19, businesses have been left at the mercy of the pandemic. Thousands of businesses have shut down. Millions of people in Kenya have lost their jobs.

The government has embarked on a borrowing spree with cash coming from the European Union, the International Monetary Fund (IMF), the World Bank, among others.

By the time Covid-19 will be over, two things will be clear; Kenyans will have trillions of indents to pay, and billionaires in Kenya would have doubled.

As Kenyans worry about tomorrow and how to fight Covid-19, Kenya Revenue Authority (KRA is busy scheming on how to tax them more.

It started with going after online businesses. KRA has already issued a notice to online businesses that will fail to file their taxes of stern measures likely to be taken against them.

On top of taxing online businesses, KRA is now thinking of those who will be downloading apps and documents.

The taxman has already sent an invite to Kenyans for comments on the proposal to impose taxes on downloadable content such as e-books, movies, and mobile apps.

Taxable supplies to be made through a digital marketplace shall include electronic services under section 8 (3) of the act and subscription-based media such as news, magazines, journals, streaming of TV shows and music, podcasts, and online gaming.

In the proposal,  “a digital market place supply shall be deemed to have been made in Kenya where the recipient of the supply is in Kenya, the payment proxy including credit card information and bank account details of the recipient of the digital supplies is in Kenya; or the residence proxy including the billing or home address or access proxy including Internet Proxy address, mobile country code of SIM card of the recipient is in Kenya.”

The proposal, it goes through, it will hit hard on Kenyans, especially the youth who are already struggling with the effects of Covid-19.

Measures announced by President Uhuru Kenyatta to help and shield small businesses in Kenya against the effects of Covid-19 seem to be only possible on paper. On the ground, things are different.

Where KRA wants to tax:

Software programs including downloading of software, drivers, website filters and firewalls.

Electronic data management including 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 customized search-engine services.

Tickets bought for live events, theaters, restaurants, etc. purchased through the internet, supply of distance teaching via pre-recorded medium or e-learning including the 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 links the supplier to the recipient, including transport hailing platforms.

Any other digital marketplace supply as may be determined by the Commissioner.

If adopted, a person supplying taxable services through a digital marketplace shall be required to register for VAT in Kenya where the digital marketplace supplies are supplied by a person from a place of export country to a recipient in Kenya in a business to consumer transaction.

Kenyans are on their own. The rich want to eat. They will have their way. But let us have our say.

READ: KRA Plans To Tax Netflix, Uber, Jumia Among Other Online Businesses