Taxation of online traders and digital trading platforms

PRESS RELEASE 23/04/2020

Kenya Revenue Authority (KRA) has directed business owners trading on digital platforms to charge Value Added Tax (VAT) on their transactions and remit the taxes to KRA.

The Commissioner Domestic Taxes, Ms. Elizabeth Meyo said in a statement that KRA, had noted with concern that some digital business owners had failed to charge VAT as required by law.

“KRA wishes to inform such persons that they are obligated under the VAT Act, 2013 to charge and remit VAT as follows:

  1. All the sales made through their digital platforms.
  2. The commission charged to the vendors for the use of their digital platforms.

“All non-compliant traders are hereby advised to comply to avoid penalties and interests on outstanding taxes failure to which appropriate action will be taken in accordance to the law. Where fraud will be detected, appropriate criminal proceedings shall be brought against the offenders,” said the Commissioner.

The Finance Act 2019, sought to clarify that income from digital transactions are VAT payable.

 

Commissioner for Domestic Taxes

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