We are coming for you if you use online platforms and avoid tax,KRA tells businesses

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BY JOAN WANJIKU,NAIROBI,23RD APRIL,2020-The Kenya Revenue Authority (KRA) has warned local businesses against the avoidance of passing on Value Added Tax (VAT) to consumers.

In a statement issued Thursday, KRA Commissioner for Domestic Taxes Elizabeth Meyo said the tax man has noted with concern the failure to pass on the charge on transactions as many more businesses move online under the Covid-19 pandemic.

“KRA wishes to inform such persons that they are obligated under the 2013, VAT Act to charge and remit the taxes,” she said.

The charges relate to all sales made through digital platforms and commissions charged to vendors for the use of the respective platforms.

Online retail businesses became the subject of taxation last year, following ammendments to the 2019. Finance Act which brought digital transactions under the tax man’s net.

The warning by KRA comes as many more conventional businesses move online due to Covi-19 related forces which have reduced the footfall of customers on brick and mortar branches.

“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,” added Meyo.

The penalty for late filing is prescribed at five percent of tax due or Ksh.10,000, whichever higher and an additional tax of two percent compounded per month.

Meanwhile, the penalty for rate payment translates to five percent of tax due plus a one percent monthly cumulated penalty

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