MPs question Uber's 'small' Sh30 million tax payment in three years

Corporate News Uber drivers at a meeting in Nairobi last month. PHOTO | SALATON NJAU  

By EDWIN MUTAI

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Summary

• KRA said compliance interventions through tax audits for the same period have given rise to assessments totalling Sh129.3 million
• National Assembly’s Transport committee says it has information that Uber rakes in billions of shillings.
• The issue of taxation has stalked taxi service Uber with accusations that it is exploiting loopholes to avoid paying the correct taxes.

Parliament has questioned the small amount of tax paid by app-hailing taxi firm Uber, suggesting that the bulk of the profits is repatriated outside the country.

The Kenya Revenue Authority (KRA) told MPs Tuesday that Uber had paid Sh30 million in taxes since 2014.

National Assembly’s Transport committee said it has information that Uber rakes in billions of shillings and repatriates it to its headquarters in San Francisco, California, USA.

“We can see that KRA is happy because they have seen Uber pay Sh30 million in taxes. These people collects billions of shillings and if they pay Sh30 million, this is very small,” said Maina Kamanda, who chairs the committee said.

“If you do your calculations and as you confirm you have not audited Uber books, you will realise they are taking out billions of shillings.”

Avoiding tax

Global firms such as Uber, Google and Amazon have come under fire for avoiding paying tax in their countries of operation, triggering fights with authorities.

The issue of taxation has stalked taxi service Uber with accusations that it is exploiting loopholes to avoid paying the correct taxes.

KRA Commissioner for Domestic Taxes Benson Karongo told MPs that the taxman collects value added tax on 25 per cent commission that Uber receives from its partner drivers for use of the app.

“We have received Sh30 million from Uber Kenya Limited out of which Sh7 million is PAYE from Uber’s 20 staff members manning its Kenyan entity in Westland’s and not from its drivers.

"The balance of Sh19 million is VAT while Sh5 million is income tax,” Mr Karongo said.

The taxman said in total, KRA has collected Sh154.5 million from 2014 from 42 players in the taxi services providers in its database, registered and operating as limited liability companies.

The KRA said compliance interventions through tax audits for the same period have given rise to assessments totalling Sh129.3 million, bringing the total revenue yield for the sector to Sh283 million over the same period.

“We have not carried out an audit on Uber but we are looking at their figures. We can’t say we are happy with the taxes they have paid because we need to look at cross-border issues. These are issues we can’t rule out on Uber,” Mr Karongo said.

Audit transactions

He told the committee that KRA has profiled Uber and wants to get into its transactions to audit and ascertain whether what the taxman collects is correct.

He said KRA is up to 50 per cent happy on how Uber have paid taxes saying the company is a visible taxpayer unlike conventional taxis, which are difficult to trace for payment of taxes.

“We will be able to follow tax compliance with automated business models like Uber,” Mr Karongo told MPs who are probing a petition filed by conventional taxis against unfair business practices posed by app hailing firms.

emutai@ke.nationmedia.com