KRA to Crack Down on Some E-commerce and Informal Online Businesses that Don’t Pay Tax

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People engage in businesses of all kinds. However, the growth of social media platforms such as Instagram, Twitter and Facebook have made it easier for anyone to sell goods and services to their online fans and friends. Some have customized e-commerce platforms for their wares. This has been the case for a long time: our feeds in Facebook are filled with people selling pieces of clothing, shoes or devices, and people trust their services by doing purchases from such ecommerce solutions.

However, the Kenya Revenue Authority (KRA) that ensures that all income generated pays sets aside its fair share of tax to the government reports that some of these businesses, most of which are unofficial (they have not been registered to remit taxes in the manner stipulated by the taxman), do not file their returns or pay taxes on transactions performed.

According to a post circulated in the dailies, taxpayers who engage in online businesses must pay their taxes, unless income from such trade is explicitly exempt in 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,’ reads a KRA statement.

The Authority further specifies the mentioned taxes, such as businesses registering for VAT and charge tax if their annual taxable income is more than KES 5 million. Those whose turnover is under KES 5 million should pay presumptive tax.

Businesses that run online will be assisted to pay these taxes. KRA says that it will shed more light into the matter in a forum that will be staged on May 17 from 8 AM at Nairobi’s Hilton Hotel.


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