Kenya Revenue Authority (KRA) has announced its plans to tax application developers in an attempt to increase its collection base.
In the new system, application developers will submit returns made on downloads made on their digital platforms.
KRA has also made it clear that income obtained from applications is subject to VAT and that it should be submitted as per the Value Added Tax Act of 2013.
In order to collect all data and information of all app developers, the taxman will consult with the Communication Authority (CA).
The information obtained will contain transactions done by both resident and foreigners doing business in Kenya.
In Kenya companies with an annual turnover of more than 5 million are required to register VAT for supplies in addition to a corporate tax of 30 percent for residents and 37.5 percent for foreigners.
Those with a turnover of less than 5 million are required to pay a 15 percent presumptive tax annually.
Individuals, on the other hand, pay 10 percent for the first 147,850 annual collections and 30 percent on income above Ksh 560,000 per year.
Currently, KRA has a 6. 1Trillion target for the period ending 2021.