Betting companies, already up in arms over a high tax regime, will be slapped with a 10 per cent exercise duty should the KRA proposals be accepted by Treasury.
“This is to ensure that we fully capture the sector. We propose provisions to support taxation and collection of tax from economic activities carried over digital platforms.”
KRA Commissioner General John Njiraini told the committee that the taxes already levied on the companies are inadequate, and there is need for a tougher taxation regime.
“Betting and other related activities have negative effects. The taxes currently being levied are not adequate,” Njiraini told the House team chaired by Joseph Limo (Kipkelion East).
KRA also intends to levy income tax on service providers that are currently out of the tax bracket.
Njiraini explained that such services include businesses within the security sector that have escaped the attention of the taxman in the past.
“Under the VAT Act, all services are subjected to the tax regime. For income tax, we have confined ourselves to management and professional services leaving loopholes that allow other service providers to escape the tax net,” said KRA in its proposals.
Should Treasury agree with the proposals, they will be included in the Finance Bill, which specifies government measures to raise revenue.