The recent digital tax measures introduced by the National Treasury will see Kenyans pay more to access digital platform services.
The government imposed 16 per cent Value Added Tax on electronic services making Netflix, Facebook, YouTube and Google to increase their service cost to consumers.
Zoom has also joined those platforms as they announced the changes to its pricing for Kenyan users beginning next month.
In an update, the firm said that its platform is registered for VAT in the country as a non-resident supplier of electronic services.
“As such, Zoom is required to collect and remit VAT on supplies made to non-VAT registered customers,” stated the firm.
In an email to users, the firm stated that Zoom Video Communications Inc (Zoom) will begin charging Kenyan VAT on or shortly after August 1, 2021, on its services supplied to customers in the country.
“Like many companies with a growing international presence, Zoom is routinely evaluating its indirect tax collection and remittance obligations,” stated the firm.
In 2019, the government by the Finance Act introduced the tax on digital supplies and the Treasury drafted the VAT (Digital Marketplace Supply) Regulations in 2020 to guide the taxation of electronic services.
This was payable on income accrued in the country from services offered through a digital marketplace.
The levy is set at 1.5 per cent of the gross transaction value and is due at the time of transfer of the payment to the service provider.
In March, Facebook announced on the site thatcharges would increase to reflect the new VAT levy.
According to the firm, Facebook ads in the country are subject to a VAT at the applicable local tax rate.
Additionally, advertisers whose ‘Sold To’ country on their business or personal address is set to the country and who haven’t confirmed that they’re advertising for business purposes are also affected.
