Popular video conferencing application, Zoom Video Communications will from August 1, 2021 charge Kenyan users a digital tax payable to the Kenya Revenue Authority (KRA).
Zoom is registered in the country as a non-resident supplier of electronic services. The communications platform falls under the category of firms meant to remit the 5 percent digital taxes which were made into law in January 2021.
The move is mostly of importance to corporations who use Zoom regularly. Users with basic accounts that can host a maximum of 100 participants per meeting, do not pay for the service.
Pro users can host more people, and have access to more premium features.
The platform will collect taxes from its subscribers and remit them to Kenya Revenue Authority (KRA).
For customers with Value Added Taxes (VAT) registration, only a KRA (Personal Identification Number) PIN is required as proof. This way, they can avoid double taxation.
However, users without tax registrations will pay for the services inclusive of VAT.
Zoom was founded in 2011 in California. However, it would come into prominence and breakthrough in 2020 at the onset of the now receding global health pandemic.
For many Kenyans, Zoom has been synonymous with terms such as social distancing, lockdown and ‘working from home.
The video communications platform has been widely been adopted by schools including universities to support virtual learning.
Corporations have also been conducting business with members of staff in different parts of the country. Conferences, meetings and other work functions have occurred as they should courtesy of Zoom since March 2020.
According to World Finance, Zoom’s sales grew by over 300% last year making it one of the fastest-growing companies worldwide.
Profits increased from Ksh238 million in October 2019 to Ksh21.3 billion in October 2020.
At the close of October 2020, Zoom had a client base of over 430,000 business customers with more than 10 employees.
This resulted in an impressive mark up approximately 480 percent from October 2019.
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