KRA targets 1,000 firms, traders in new digital service tax

Times Tower, the headquarters of the KRA, in Nairobi. FILE PHOTO | NMG

By JOHN MUTUA
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Summary

• The Kenya Revenue Authority (KRA) is targeting to net some 1,000 businesses and persons under the new digital taxes that came into force on January 1.
• The taxman said that it has posted high numbers of businesses and individuals seeking to register under the new tax bracket since its roll-out last week.
• KRA did not, however disclose the number of registrations made so far under the digital taxes bracket but said that it anticipates to hit 100 new registrations from non-residents businesses and persons by end of this week.

The Kenya Revenue Authority (KRA) is targeting to net some 1,000 businesses and persons under the new digital taxes that came into force on January 1.

The taxman saidthat it has posted high numbers of businesses and individuals seeking to register under the new tax bracket since its roll-out last week.

KRA did not, however disclose the number of registrations made so far under the digital taxes bracket but said that it anticipates to hit 100 new registrations from non-residents businesses and persons by end of this week.

The Income Tax (Digital Service Tax), 2020 came into effect at start of the month where KRA is eyeing businesses and persons selling services and goods online in its latest push to bring more taxpayers into its net.

“The uptake of Digital Service Tax (DST) has been incredibly positive by both resident and non-resident persons operating in the digital market,” KRA said in responses to the Business Daily last Friday.

“KRA is estimating more than 1,000 businesses to register and account for DST.”

The taxman is banking on the Covid-19 disruptions that have accelerated the use of online platforms to sell goods and services and raise Sh5 billion from the sector in the six months to June.

Under the Income Tax (Digital Service Tax), 2020, all businesses selling services online will pay a flat tax of 1.5 per cent on the value of goods supplied and sold online or services offered through digital platforms.

Services and goods targeted under the taxes include e-books and movies, music, and games, tickets for live events and theatres, subscription-based media including news, magazines and digital content.