This archive report was first published on 21 July 2021.
Kenyan users of video conferencing platform Zoom will soon be paying more to use the service, following the company's announcement of changes in VAT pricing for Kenyan users, effective next month.
According to an email sent to users, Zoom will begin charging Kenyan VAT on or shortly after August 1, 2021, on its services supplied to customers in Kenya.
Zoom's announcement is the latest from Silicon Valley as the implementation of the new levies recently introduced by the government and targeted at digital platforms gets underway.
Earlier this year, Facebook informed Kenyan users that advertisements on the site and photo-sharing application Instagram would increase to reflect the new VAT levy.
Facebook's announcement came after the Treasury introduced the Digital Services Tax (DST) last year, payable on income accrued in Kenya from services offered through a digital marketplace.
The DST 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.
Additionally, the Value Added Tax (Digital Marketplace Supply) Regulations 2020 proposed VAT on products and services sold online, with the law pegged on the Value Added Tax Act, 2013, which set a 16 per cent rate.
Zoom's announcement has sparked concerns among industry stakeholders, who have cautioned that the administration of the taxes could prove difficult for tax authorities given the complexity of the Internet ecosystem.
