KRA Reminds Online Merchants to Charge and Remit VAT


The Kenya Revenue Authority cautioned traders on online digital places on their practices revolving charging and remitting value-added tax (VAT).

“It has come to our attention of the Kenya Revenue Authority that some businesses engaged in trading on digital platforms are not charging VAT made through their platforms (digital market places). Specifically, some of the digital market place owners and the persons trading through such platforms have been found not to honour their tax obligations,” KRA said in the notice.

KRA cautioned these traders that they are obligated under the VAT Act, 2013 to charge and remit VAT on all sales made through their digital platforms and commissions charged to the vendors for the use of their digital platforms to transact.

The VAT Act 2013 provides a general penalty of a fine not exceeding one million shillings or imprisonment of a term not exceeding years or both if someone is convicted of an offense under the Act.

“All non-compliant owners, operators and persons are hereby advised to comply with the provisions of the VAT Act on digital market places in order to avoid being charged penalties and interests on outstanding taxes, which may be determined during compliance checks,” KRA said.

KRA is now coming hard at online traders at a time when people are turning to online trading due to the coronavirus epidemic. Last year, parliament approved the addition of digital marketplaces as an avenue to raise VAT in the Finance Act 2019 and now KRA wants to act expeditiously to make sure these merchants remit their owed taxes.