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Court decision on VAT to rattle Kenya’s gig economy
Critics warn the decision could discourage participation in the gig economy, with some traders steering clear of platforms to avoid the 16 percent VAT.
Digital taxi apps, online delivery services and e-commerce platforms will be required to withhold and remit the 16 percent value-added tax (VAT) on supplies made through their platforms, following a High Court decision that is likely to rattle Kenya’s nascent gig economy.
In a landmark decision, the Kenya Revenue Authority (KRA) has been allowed to collect Sh82,248,150.74 in VAT from Sendy—the collapsed start-up that described itself as a digital marketplace, linking third-party transporters to customers—after the court found that the logistics firm controlled key aspects of its network, including billing and receiving payments in its own name.
