Kenya Revenue Authority (KRA) has issued a stern warning to local online traders to pay their taxes.
In the announcement, made on its official website, KRA says, “KRA has noted that some taxpayers engage in online business and they do not file returns or pay taxes on the transactions. KRA would like to advise that unless income or supply is expressly exempt in the law, appropriate taxes should be paid.”
KRA has fallen short of its target repeatedly, most recently in the first half of 2018/2019. As such it seeks to improve tax compliance and find more avenues through which to impose taxes on Kenyan taxpayers.
The growth of social media brought with it a new pipeline for traders, who now have a direct channel to communicate with and sell to their customers. Some traders have customized their own e-commerce platforms, to sell clothes, electronics among many other commodities.
KRA alleges that majority of these traders avoid paying their taxes, and has thus issued a warning.
The KRA statement reads, “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.”
Traders (both off and on-line) with a taxable income above KES 5 million are required to to register for VAT obligation and charge tax, while those whose income is south of KES 5 million are required to pay presumptive tax.
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KRA has organized a training session for all online traders to learn about tax compliance and to get help in declaring taxes. “To this end, all taxpayers engaged in online trading in goods and services are invited for a sensitization forum on 17th May, 2019 from 8:30 am to 11:00 am at Hilton Hotel.”
