eCommerce sales tax is a complex and emerging issue even in developed economies. Quick challenge examples include:
1. How do you tax a digital good - given that KRA/Customs guys are used to "physically inspecting" before taxing. Say I pay for a music download from Safaricom/Google/Apple app_store, or buy a digital book from amazon.com, where and how does KRA come in? They dont even know the transaction took place :-)
2. In case of a physical good bought online, the KRA guys can and will catch it at the port of entry. Chances are that if you bought it on amazon.com, the Americans may have taxed the good at the port of "exit" and the Kenyans will want to tax it at the port of "entry". End result, the good becomes too expensive = discouraging online trading.
3. What of e-Services? Maybe I
ran an online workshop/research/consultancy to some locals inhabiting some islands in the Bahamas and I got paid nicely. How does KRA know about this, and should they?Or I developed an online application for Nokia which is selling well online and am picking royalties, should I copy in KRA?
This are just some quick thoughts...but I agree with other listers, let the ecommerce industry pick up, then bring in the taxation later. However, we do need to thing around these issues in advance.
walu.
-------------------------------------------------------
From: Ali Hussein <ali@hussein.me.ke>
To: jwalu@yahoo.com
Cc: kictanet <kictanet-bounces+ngethe.kariuki2007=yahoo.co.uk@lists.kictanet.or.ke>; KICTAnet ICT Policy Discussions <kictanet@lists.kictanet.or.ke>
Sent: Friday, May 10, 2013 4:41 AM
Subject: Re: [kictanet] Is an online sales tax good for eCommerce? What are
the regulatory environments for eCommerce in Africa?
Thanks guys. That's the crux of the matter really.
So victor, as a lawyer what's your take? When the law is silent? For example jumia.co.ke just opened for business in Kenya. Do they remit taxes including VAT to KRA? How are they structured? Are they a registered Kenyan Company? or are they domiciled in Mauritius for tax purposes?
ICT Researcher, usually innovation moves ahead of regulation (the case of Mpesa is a good example of that) but eventually regulation catches up. My opinion is that this should balance the computing interests of Government, free enterprise and consumer protection which in my opinion are not aligned most of the time.
As an African ICT Hub should we also be leading the way in finding/crafting the best
regulator environment or should we let nature to take its course?
Ali Hussein
CEO | 3mice interactive media Ltd
Principal | Telemedia Africa Ltd
+254 713 601113
"The future belongs to him who knows how to wait." - Russian Proverb
Sent from my iPad
Well, we still have our good ol VAT
Act which applies to goods and services - without distinction as to the means through which the transaction has occurred, which in a sense means we have online sales covered.
Then there is the question of loss of taxes especially for those transactions involving income "made in Kenya" by companies i.e. the eBays, Apples, Googles, based outside Kenya operating online and transacting "in Kenya" - do they pay VAT, or income tax (where applicable)?
Victor
_______________________________________________kictanet mailing listkictanet@lists.kictanet.or.kehttps://lists.kictanet.or.ke/mailman/listinfo/kictanetUnsubscribe or change your options at https://lists.kictanet.or.ke/mailman/options/kictanet/info%40alyhussein.comThe Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as
a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.
_______________________________________________
kictanet mailing list
kictanet@lists.kictanet.or.kehttps://lists.kictanet.or.ke/mailman/listinfo/kictanetUnsubscribe or change your options at
https://lists.kictanet.or.ke/mailman/options/kictanet/jwalu%40yahoo.comThe Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.
KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.