KRA says process of hiring digital tax consultant to take longer

Thursday, January 9th, 2020 09:00 |
KRA headquarters. Photo/File

Kenya Revenue Authority (KRA) is still in the market for a consultant that will enable it to tax the country’s digital economy.

A source at KRA intimated to Business Hub that the process of hiring a consultant could take up to six months because “the sector is new, and we are looking at how it is done globally.”

“It is a restricted tendering process which can take up to six months as we are taking a longer route. We are currently collecting ideas to prepare the expression of interest,” the source, who declined to be identified, said.

Speaking during the taxpayers’ week in Nairobi last year, KRA commissioner in charge of strategy and innovation Mohammed Omar said the taxman will leverage on data analytics and had identified the digital economy as a key component to expand the tax base eying online transactions for tax obligations.

Those likely to be affected include Jumia, Yahoo, Google, Uber, Netflix, Facebook and YouTube. 

Omar said the authority is in discussions with the Central Bank of Kenya (CBK), financial institutions and other business associations over possibilities of e-commerce taxes.

Online transactions

The government has been on an over-drive to expand its tax base, having already targeted professional groups and small, medium and micro enterprises, with Omar saying online transactions and rentals are the next frontier to boost revenues.

Kenyan authorities feel that some international tech companies are denying the government revenue accrued from online operations and advertisements by declaring profits abroad, where they are headquartered.

“We need a procedure on taxation in this sector amid an ongoing global push for the same by Organisation for Economic Co-operation and Development,” KRA had said  in October.

OECD wants to make big tech firms pay taxes in countries where they have a significant number of users, a windfall for a country like Kenya.

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