It Will Soon Be A Crime To Sell Things Online Without KRA Clearance

by Business Watch Team

By Brian Wafula

Kenya might not be amongst the countries with the highest imposed tax rates, but at this rate of taxation, it is almost clear that individuals living below $1 a day are going to face life in a rough manner.

Last week, it came to Music Copyright Society of Kenya’s (MCSK) attention that entertainers, DeeJays, and Comedians alike were flooding Social Media with live performances and entertainment to their fans.

Most musicians would go live on Facebook, Twitter, YouTube, and many other platforms as they responsibly heed to governments directive of staying at home and (keeping a social distance) avoiding crowded places.

The organization thus decided to give out a warning to those going life on Social platforms advising them to acquire relevant Licenses before broadcasting their shows.

Apparently now, the National Treasury has published draft rules bringing the digital media market under the tax house, termed as the Value Added Tax (Digital Market Place Supply) Regulations of 2020.

This implies that lovers of live streaming media, music, and podcasts and the general subscription-based media users will be imposed with value-added tax (VAT).

Subscriptions to famous streaming sites such as Netflix will now be subject to VAT charges as the definition of the digital market place brings to focus any platforms making direct transactions with their users in Kenya.

These regulations precede the passing of provisions on tax modules in the digital market place through the Finance Act, 2019 which gave the Cabinet Secretary of the National Treasury with the sole responsibility of setting taxing modalities.

Other targets by the new VAT net are the sale of event tickets, software programs, downloadable digital content as well as web-hosting services.

It is the local citizen who is going to shoulder the costs of this imposition of new tax models with respective suppliers expected to surrender all the records of their supplies made in the country indicating VAT deductions against their supply values.

Failure to which will attract tough penalties including being barred from accessing the local digital market place. Consequently, for the cut to effect the action and reaction, firms in the digital market place will be the subject of income tax at the rate of 1.5 percent of gross transaction values under the proposed Digital Services Tax included in the Finance Bill, 2020.

In spite of the move to include digital businesses under tax havens, analysts argue the move is still audacious. And a catch comes to the implementation of the tax regulations to the ever amorphous digital transactions.

Related Posts

Copyright © 2023 – All Rights Reserved | Business Watch