Zoom Video Communications will from August 1st , 2021 begin to charge Kenyan users a digital tax payable to the Kenya Revenue Authority (KRA).
Zoom, which is currently registered in Kenya as a non-resident supplier of electronic services, falls under the category of firms meant to remit the 5% digital taxes. These taxes were made into law in January 2021.
The taxman identified that many corporations that use Zoom regularly and host large volumes of people do not pay for the service. Pro users can host more people, and have access to more premium features. The platform will thus collect taxes from its subscribers and remit them to Kenya Revenue Authority (KRA).
For customers with Value Added Taxes (VAT) registration, only a KRA (Personal Identification Number) PIN is required. The use of the unique identification will aid in avoiding double taxation. However, users without tax registrations will pay for the services inclusive of VAT.
For many Kenyans, Zoom has been synonymous with terms such as social distancing, lockdown and ‘working from home. The video communications platform has been widely been adopted by schools including universities to support virtual learning. Corporations have also been conducting business with members of staff in different parts of the country. Conferences, meetings and other work functions have occurred as they should courtesy of Zoom since March 2020.
According to World Finance, Zoom’s sales grew by over 300% in 2020, making it one of the fastest-growing companies worldwide.
The company’s profits also increased from Ksh. 238 million in October 2019 to Ksh. 21.3 billion in October 2020. At the close of October 2020, Zoom had a client base of over 430,000 business customers with more than 10 employees. This resulted in an impressive mark up approximately 480% from October 2019.