Call for comments: New VAT regulations in Kenya

Other online business taxable supplies will include electronic services such as video streaming, news, magazines, journals, podcasts and online gaming. Taxes will also be introduced on downloadable digital material including e-books, films and mobile applications.

The invitation follows the amendments to the VAT Act of 2013 by the Finance Act 2019, which clarifies that VAT is applicable to supplies made through a digital marketplace.

The drafted Digital Marketplace Supply VAT regulations have been developed and are currently available on the KRA website.

The draft indicates that digital market place supply will be deemed to have been made in Kenya if the recipient of the supply is in Kenya, the payment proxy including credit card information and bank account details of the recipient of the digital supplies is in Kenya, or the residence proxy including the billing or home address or access proxy including internet proxy address, mobile country code of SIM card of the recipient, is in Kenya.

The KRA says the move aims to offset some of the losses caused by the COVID-19 crisis. If the tax regulation is adopted, internet access and music streaming subscriptions may become more expensive.

To ensure wide consultation and public participation, the KRA says it is inviting all interested parties to submit their comments on the draft regulations before 15 June.

The comments should be addressed in writing to:

The Commissioner General
Kenya Revenue Authority
PO Box 48240-00100
Nairobi

or emailed to stakeholder.engagement@kra.go.ke.

For more information, call 020 4 999 999, 0711 099 999 or email callcentre@kra.go.ke.