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    World Bank Skips Kenya as it Invests Sh547 Billion in Africa

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    Video: Famous Kilimani Instagram Socialite Dies

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    Video: Why Diamond’s Wasafi TV Has Been Shut Down

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    Rehabilitating Churchil Show Comedian Loses a Father

    Njugush’s son Tugi wins YouTube award

    Njugush’s son Tugi wins YouTube award

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    Victoria Rubadiri pens heartwarming message for her mother

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    Frankie, Corazon Kwamboka unveil son’s face for the first time 

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    Do You Want to Know what a Scam is? Blogger Cyprian Nyakundi Explains

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    How George Wainaina is using KANU to sanitize corrupt political associates

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    Preston’s Fisher to miss three games for grabbing player’s genitals

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    Frustrated Messi is tired of taking Barcelona blames

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Kenyans to pay for online music in the new financial year

N O by N O
June 3, 2020
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KenGen MD Meets Renown Climate Change Consultant

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Consumers of digital products will soon be forced to pay higher for goods and services bought through the Internet after the Government mooted rules to introduce Value Added Tax (VAT) on digital content consumed in the Kenya.

The Value Added Tax (Digital Marketplace Supply) Regulations, 2020 is bringing new obligations that will disrupt operations for both local and international companies operating in the internet.

“VAT shall be charged on taxable services supplied in Kenya through the digital market place.Taxable supplies made through a digital market place shall include electronic services and downloadable mobile apps, e-books, movies.” read part of the regulations.

The new rules have do not indicate the new tax but is pegged on the Value Added Tax Act of 2013 that set a 16% rate, which was recently revised to 14% in April this year due to coronavirus outbreak.

In the new law, subscription-based media content like news, magazines, journals, streaming of TV shows and music, podcasts and online gaming shall also be subject to the new digital services VAT.

Most of the teachers who are now providing their services through online platforms will have to register and pay for the VAT levy. The same applies to Kenyans providing data management services as web hosting, data warehousing, file sharing and cloud storage services.“A person supplying taxable services through a digital marketplace shall be required to register for VAT in Kenya,” the explains.

This is applicable to both giant service providers such as Google, Facebook and Netflix as well as entrepreneurs running their businesses online.

The proposals come in the back drop of new digital services tax introduced by the ministry of finance that are expected to come in effect this financial year.

“Notwithstanding any other provision of this Act, a tax to be known as digital service tax shall be payable by a person whose income from services is derived from or accrues in Kenya through a digital market place,” National Treasury explained in the 2020 Finance Bill.

The tax will apply to both Kenyan and foreign proprietors and it will be deducted at the point of transfer of payment at 1.5% of the gross transaction value. Kenya Revenue Authority (KRA) has in the recent years pushed for more taxation on multinational technology giants as revenues from local sources continue to shrink with and a widening fiscal deficit.

The proposed regulations have been met by mixed reactions from technology firms like Uber, Google and local firms that have raised questions on KRA’s capacity to effectively administer digital taxes.

Last year Google said a digital tax could spike a rise in the cost of products and services pointing that some digital platforms are end-to-end encrypted. Enacting tax measures on such platforms would amount to violating constitutional privacy rights of Internet users.

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