EDITOR’S OPINION
The Kenya Revenue Authority has today clarified what most Twitter, Instagram and Facebook infuencers had feared. That it is coming after their meagre earnings.
Digital Service Tax (DST), according to KRA, is chargeable to services offered in the digital marketplace and not goods.
“Social media influencers will be liable to pay digital service tax since their income is derived from or accrued from the provision of services through a digital marketplace or by providing digital advertising services in Kenya”, KRA posted on their social media pages.
Although not all social media influencers earn meagrely if you like; the DST should not have touched on this. But it did.
When a govt taxes the most trivial things in a society, it is an indication of desperation that stems from bad governance.
Recently, KRA data showed that it collected Sh166 billion against a target of Sh164 billion representing a 3.5 per cent growth over the same period in 2019.
Some explained this to be, one, better tax collection regimes, two, which is not so positive, a witch-hunt ongoing (as in the cases of KEROCHE and African Spirits Ltd) which have spilt into looking for everything to tax.
However, KRA Commissioner General Githii Mburu attributed the improved receipt to a rebounding economic environment following the significant hit occasioned by the COVID-19 pandemic.
βThe improved performance is attributed to the economic recovery following the relaxation of the stringent COVID-19 containment measures and enhanced compliance efforts by KRA in the month of December,β he said in a statement.
“For a nation trying to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”, Winston Churchill.
The Kenya situation over the past 7 years has been to borrow, steal, plunder in endless overpriced projects. Now, according to Treasury Cabinet Secretary Ambassador Ukur Yatani, money has run out. In short the government is broke.
Yesterday, President Uhuru Kenyatta admitted rather carelessly that over Sh2 billion is wasted daily by his govt.
It is a ghastly sight where no one seems to be in control parastatal heads do whatever they like, civil servants loot without mercy and the president seems lame-duck to act.
The police service and the anti-corruption agency have been accused of being lenient or overwhelmed by the circus so whatever they do is to ‘get their cut’ and look the other way.
It is a failure in governance that has pushed KRA to try to tax even the diaspora, for through the Central Bank of Kenya (CBK), a survey is being floated to try to understand dispora remittances which have grown to over 340 billion in a pandemic year.
Whereas it looks good on paper, this is read as a ploy to try to rope the ones who fled Kenya for greener pastures because of the same bad governance, to start paying taxes. This is just a thought by some.
It should be resisted as some have.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]
