I was reading the Nation the other day and was quite shocked to discover that once again, the tax man is coming for someone else.
‘The Kenya Revenue Authority (KRA) has set its sights on developers of income-generating digital applications (apps) as part of wider plans to rope online businesses into the tax net.
The app developers are staring at tax demands on downloads on their platforms and resultant revenue, the taxman announced Wednesday.
KRA says it will work with the Communications Authority of Kenya (CA) to obtain transactions data by resident and foreign-based app developers doing business in Kenya.’ (the East African)
This, apparently, will lead to platforms like YouTube and Netflix being taxed in Kenya.
On the one hand, I see the sense in taxing multimillion dollar global corporations for the money that they are making in Kenya, tax-free. Of course if Kenyans are using the product, and they are making money from Kenyans, then it makes sense to give the money to the Kenyan government, no?
The same has been done in several countries all over the world, such as France, who recently put a three percent tax levy on something similar. Uganda just did it as well, in a misguided manner that taxed the citizens for using digital platforms like Facebook, and that led to a third or so of internet users in Uganda falling off Facebook and the internet completely – because surely, the approximately Sh200 tax being levied is about how much a typical Kenyan user would use in four days, assuming one is buying bundles – even less if one is not a heavy user, or watching too many videos.
That, in my opinion, was going about it the wrong way.
My question, though, is, this is the next move in a series of strange moves that the government insists on in the name of generating more money to support Kenya’s ever-ballooning budget.
In the last few years, our budget has gone up astronomically, just in the space of our current president’s term. And yet, instead of understanding the basic precept that you cannot tax a country into prosperity, the government and its ministries insist on taxing something – anything – more. Instead of reducing our debt, we take on more.
Instead of sluicing off a few hundred members of the executive who do nothing, we increase allowances. Surely, in terms of basic financial management, the answer would be to stop spending so much money? Much like in high school, where if you needed more money after pocket money had run out, you would either reduce your buying of crisps at the tucky, as opposed to stealing money from your fellow cube mate.
And honestly, I’m just worried about what the tax man is going to try and take from me next. There’s no way they will stop at YouTube and Netflix, simply because there is no way that money will be enough, and the money will never be enough – not for prosperity, and not for the greed of those currently in power.
Inevitably, the taxation may become too much to maintain a market in a country these American companies don’t even care about.
Then what? More, and higher, fuel levies? A newly created pet tax, sounds familiar…how about tax for more garbage disposal that doesn’t even exist as we speak? What next, will we pay a tax for breathing also?