Kenya eyes $45 million in revenue as it implements digital services tax – Techpoint Africa

digital tax

The Kenyan authorities has applied taxes on Web companies and entrepreneurs. It desires to convey as much as 1,000 corporations and people underneath its tax bracket which, it claims, may generate as much as $45 million (Ksh 5 billion) in income by June 2021.

The Kenya Income Authority (KRA) publicised the Income-tax (Digital Providers Tax) in 2020, following the Finance Act 2019. Companies and People would pay a 1.5% payment on the worth of products and providers offered or provided on-line.

A few of these providers embrace e-books, motion pictures, music, video games, theatre and occasion tickets, information platforms, magazines and different digital content material.

Recall that in June 2020, the tax regulator set up a special unit to trace revenues on each digital transaction within the nation. But it surely positioned the onus on corporations to register and begin paying their taxes.


It additionally appeared like this transfer may hit a possible snag with the launch of a commerce settlement between Kenya and the US.

The KRA claims that resident and non-resident companies providing providers in Kenya have began registering. It expects the quantity to hit 100 earlier than the week runs out, and 1000 by June 2021.

The COVID-19 induced disruption has moved a number of companies on-line, and the KRA expects this to work in its favour in 2021.

Whereas companies are shifting on-line, and tech giants like Amazon have raked in substantial eCommerce revenues, this expectation won’t be so easy in Africa.

In addition to the apparent problems with a shaky commerce infrastructure, the pandemic has negatively affected on-line and offline companies. Even eCommerce behemoths like Jumia attest that buyers spent extra on low-value important objects in 2020.

The disruption of shipments additionally meant on-line distributors should spend extra on fulfilment bills. At a media meetup in December 2020, Juliet Anammah, Chairperson for Jumia Africa, defined that Africa must give attention to long run enterprise development as a substitute of fast acquire.

The implementation would possibly show to be robust, and it stays to be seen what the end result would appear like.

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