Kenya Revenue Authority signage on a building.
On Saturday, April 25, Kenya Revenue Authority (KRA) warned business owners trading on digital platforms who were not paying Valued Added Tax (VAT).
In a statement, the authority noted that some businesses engaged in trading on digital platforms but were not charging VAT on their items.
“Specifically, some of the digital market place owners and the persons trading through such platforms have been found not to honour their tax obligations,” read the statement in part.
KRA further informed that the business owners were obligated to pay tax as indicated in the VAT Act, 2013.
“Business owners need to charge and remit VAT on all the sales made through their digital platforms.
“They should also charge and remit commissions charged to the vendors for the use of their digital platforms to transact,” read an excerpt from the document.
KRA urged the traders to comply with the provisions of the VAT law on digital market places.
“Traders are urged to comply to avoid being charged penalties and interests on outstanding taxes, which may be determined during compliance checks,” read the statement.
The authority warned that criminal proceedings would be brought against offenders.
In the wake of Covid-19, some businesses have taken their jobs online, with the hope that they will get clients while at the same time following the government directives of ‘staying at home’.
Some of the businesses that have resulted to online trading include; Supermarkets, restaurants and the fashion industry.