The Kenya Revenue Authority (KRA) has formed a special unit that will oversee tax collection from digital companies.
The unit will ensure digital marketplace players pay taxes as the taxman finds more ways to meet his tax expectations.
“To ensure that the digital market sector pays their fair share of taxes, KRA has set up a dedicated unit to facilitate the taxpayers in this sector in the determination and accounting for taxes,” said Caxton Masudi, the deputy commissioner in charge of policy and domestic taxes talking to the Business Daily last week.
The firm says it will rely on data-driven detection in taxing multinationals like Netflix.
KRA is targeting multinationals as well as other digital marketplaces in its quest to increase revenue. Earlier this month, the National Treasury published the Value Added Tax (Digital Marketplace Supply) Regulations, 2020 draft.
According to the draft, digital firms have to pay the taxman 1.5% on the value of digital transactions as income tax.
The draft provided a wide scoop on digital content that will be taxed from subscription-based media, podcasts, online gaming; music, and downloadable digital content, including mobile apps, e-books, and films; and even software programs.
According to the publication, a company will be liable to remit taxes to KRA as long as their digital content is “paid for through a Kenyan bank, credit card or SIM card and delivered to an IP address in the country.”