Zoom To Invade Kenyans' Pockets With KRA Tax

Zoom is registered in Kenya as a non-resident supplier of electronic services, thus it falls under the category of companies meant to fork out the 5 percent digital taxes that came into force in January 2021.

Zoom To Invade Kenyans' Pockets With KRA Tax

Global popular videoconferencing platform Zoom will become the latest app to charge Kenyan users with digital service tax through the Kenya Revenue Authority (KRA) as from August 1, 2021.

Zoom is registered in Kenya as a non-resident supplier of electronic services, thus it falls under the category of companies meant to fork out the 5 percent digital taxes that came into force in January 2021.

The move will likely hurt Kenyans financially as they now depend on the platform for regular corporate meetings, interviews with media houses (local and international) as well as social interactions from anywhere on Earth. Users with basic accounts that can host up to 100 people per meeting, do not pay to use the service. 

Users on pro plan however pay to host more people and they are provided with more features.

President Uhuru Kenyatta during a virtual meeting with top US officials. /FILE

The platform will collect taxes from subscribers to be remitted to KRA. 

For customers with merely a Value Added Tax (VAT) registration, only a KRA Personal Identification Number (PIN) is required so as to avoid double taxation. However, users without the tax registrations will pay inclusive of VAT. 

Zoom was founded in California, USA in 2011 but would get its major breakthrough in 2020 when the COVID-19 pandemic ravaged the planet. Many Kenyans use the platform as a means of realising social distancing and working from home as well as navigating the inter-county lockdowns. 

The platform has also been adopted by a majority of schools and universities to support online classes.

Corporations have also been using it to conduct their businesses across the country with members of staff. Meetings, conferences and other work functions have all been undertaken without one having to leave his or her house. 

According to World Finance, Zoom’s sales grew by over 300% last year making it one of the fastest-growing companies in the world. Profits shot up from Ksh238 million in October 2019 to Ksh21.3 billion in October 2020. 

By the end of October 2020, Zoom had a client base of over 430,000 business customers with more than 10 employees. This resulted in an impressive jump of approximately 480 percent from October 2019. 

Back in March, Facebook became the latest platform to tax Kenyans through KRA's digital service tax, though the VAT will apply to individuals who use the platform as a means to market and sell their products.

Facebook app on a smartphone. /FILE