How Kenyans Can Amend KRA's Digital Service Tax Proposal

  • Kenya Revenue Authority signage on a building
    Kenya Revenue Authority signage on a building
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  • The Kenya Revenue Authority (KRA) has offered Kenyans an opportunity to share their opinions on the Digital Service Tax proposed by Treasury CS Ukur Yattani. 

    While presenting the 2020/21 Budget in Parliament on Thursday, June 11, Yattani proposed the taxation of online business transactions at a rate of 1.5 per cent. 

    "To ensure wide consultations and public participation as stipulated in the Constitution of Kenya and the Statutory Instruments Act 2013, KRA invites sector players, tax professionals and members of the public to submit their comments on the draft regulations," KRA announced.

    The comments should be addressed in writing to the Commissioner-General, KRA. P.O. Box 48248-00100, Nairobi or emailed to stakeholder.engagement@kra.go.ke.

    Treasury CS ukur Yattani during his address in Parliament on June 11, 2020.
    Treasury CS ukur Yattani during his address in Parliament on June 11, 2020.

    KRA stated that the deadline for those wishing to propose amendments to the draft regulation should do so by Monday, June 15. 

    Among transactions to be charged will be downloadable digital content including mobile applications, e-books and movies, subscription-based media including news, magazines and journals.

    Others include streaming of TV shows and music, podcasts and online gaming, software programs including 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 will also be taxed under the new proposal.

    The regulation will enable the taxman to monitor online trade transactions between both local and international merchants and their customers in the country.

    Stakeholders dubbed the law as controversial, arguing that it may infringe on the rights of consumers as stipulated in the Data Protection Act. They argued that marketers may be compelled to share information with third parties.

    Speaking with Kenyans.co.ke, Nicholas Gachara, a financial analyst based in Nairobi clarified the relation between the regulation and the data protection law.

    "The marketer won't share data with the government. All they have to do is share the figures and files on cash sales. It will be tiresome to provide details of over millions of people accessing sites.  They also cannot ask for your private information while you are downloading the items.

    "However, my query lies with the 1.5 per cent transaction rate. This may be the withholding tax as the applicable VAT rate is 14 per cent. If you source anything digitally, KRA will ask for 14 per cent," Gachara stated.

    Kenya Revenue Authority's poster urging Kenyans to voice opinions over the Digital Service Tax in June 2020.
    Kenya Revenue Authority's poster urging Kenyans to voice opinions over the Digital Service Tax in June 2020.
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