A couple of weeks, the nation’s taxman the Kenya Revenue Authority (KRA) revealed a plan to tax sellers who use social media platforms to broadcast their trade. These informal ecommerce businesses are nothing new in a market that has widely adopted the offerings of social media sites, including Facebook, Twitter and Instagram for a tonne of reasons, including doing business.
According to the Authority, people who engage in such businesses should file their fair share of taxes according to the law.
KRA would, therefore, like to remind the taxpayers that the self-assessment regime requires them to file and pay their taxes which may include; VAT, Excise Duty, Withholding Tax, PAYE, Corporate taxes and any other tax obligation required under the business.
Now, the County of Nairobi has announced plans to tax informal businesses that use digital platforms to sell their products.
According to Nairobi News, City Hall will start enforcing this new regulation on July 1.
We are not sure how the two developments are related, but one thing is clear: authorities are using all means available to supplement their strained budgets by taxing unexploited avenues. This became apparent after the reading of the 2019/2020 budget by Treasury CS Henry Rotich. While the budget lifted taxes for some ICT-related businesses, it extended it tax-collecting arm to new frontiers.
On the other hand, it is worth noting that City Hall is planning to raise parking fees, preceded by the County’s decision to adopt a new digital revenue collecting platform after the exit of JamboPay.
We will update the post once we find out how the County is planning to enforce the new regulation for unofficial online retailers.