App developers are next in line to face tax demands on downloads on their platforms and resultant revenue The Kenya Revenue Authority (KRA)announced Wednesday. KRA has set its sights on developers of income-generating digital applications (apps) as part of wider plans to rope online businesses into the tax net.
KRA says it will work with the Communications Authority of Kenya (CA) to obtain transactions data by resident and foreign-based app developers doing business in Kenya. Provision of online platforms for use by third-parties is taxable under the Value Added Tax (VAT) Act 2013, the KRA said Wednesday, saying this would attract the standard 16 percent levy.
“VAT applies on those apps because you are providing a service which is not zero-rated or exempted,” The deputy commissioner for corporate policy, Maurice Oray said.
The taxman will, however, have to wait for the National Assembly to ratify the “Multilateral Convention on Mutual Administrative Assistance in Tax Matters”, a treaty that enables it to exchange and get specific data on tax evaders across the world.
Uganda in July last year slapped 200 Ugandan shillings tax per day for use of social networking platforms such as Facebook, Twitter and WhatsApp, a move that saw internet subscriptions fall in the first three months of its implementation.
Legislators in France last month passed a law slapping a three percent tax on revenue made in the European country by large internet firms such as Google, Apple, Facebook and Amazon.