× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

PwC pokes holes in implementation of KRA’s digital tax

BUSINESS
By Graham Kajilwa | April 29th 2021

Audit and consultancy firm PwC Kenya has pointed out ambiguities in the application of the digital service tax (DST) that came into effect on January 1, 2020.

It is charged at 1.5 per cent from income generated digitally by businesses. It seeks to boost Kenya Revenue Authority (KRA) collections from the digital space.

Targeted businesses include online delivery services and streaming platforms such as Netflix and YouTube.

PwC said emerging issues on compliance range from registration to payment, which are yet to be configured in the iTax platform. It noted that non-resident entities subject to the DST only have the option to register in their own capacity.

In case of any non-compliance, the directors will be held accountable.

“PwC view is that DST is applicable if there is an existence of a digital marketplace, generation of income from the provision of services through a digital marketplace and provision of digital services to a user located in Kenya, IP address, a debit or credit card located in Kenya,” noted the firm in a statement.

The tax is a prerequisite of value-added tax registration for digital marketplace supplies with entities that aren’t subject to DST being required to register.

“This may lead to administrative complexities and unnecessary queries from KRA,” it says.

PwC Manager and Corporate Tax Specialist Nicholas Kahiro said though the law targeted non-resident compliance, it has affected residents as well.  PwC argues DST returns are configured on iTax as a payment return, and not a monthly (return).

“The legal ambiguities include KRA’s general position that all services provided electronically are subject to DST even if no digital market place exists with KRA issuing DST notifications and demanding DST without fully understanding the business operating models,” noted PwC.

Share this story
Truckers resume S Sudan trade route despite attacks
There is a cutthroat competition for the Juba transport business among Kenyan truckers and their Ugandan counterparts.
Survey: Why 40 pc of workers want to quit their jobs
More than half of 18 to 25 year-olds in the workforce are considering quitting their job. And they are not the only ones.
.
RECOMMENDED NEWS
Feedback