Blogging

Web-hosting firm dumps Kenya on punitive taxes

Economy

Web-hosting firm dumps Kenya on punitive taxes


kra

Kenya Revenue Authority headquarters on the Times Tower in Nairobi. FILE PHOTO | NMG

BDgeneric_logo

Summary

  • Bulgarian web-hosting firm, SiteGround, has stopped signing up new purchasers in Kenya, citing excessive compliance prices.
  • The firm blames pricey tax-related guidelines for its exit, shutting the door on start-ups trying to arrange on-line providers on a low price range.

Bulgarian web-hosting firm, SiteGround, has stopped signing up new purchasers in Kenya, citing excessive compliance prices.

The firm blames pricey tax-related guidelines for its exit, shutting the door on start-ups trying to arrange on-line providers on a low price range.

“Due to new local regulations (mostly tax-related), we have recently stopped offering new sign-ups for a number of countries and Kenya is one of them,” SiteGround replied to a Kenyan net designer, who had unsuccessfully sought to enroll an account for a shopper, by way of Twitter.

“Complying with said regulations would be expensive for us, making offering our product there not feasible for us.”

Players within the business have linked SiteGround’s determination to the introduction of Digital Service Tax on the fee of 1.5 per cent of the worth of products or providers provided and bought on-line from January 2.

The Sofia-based firm — with knowledge hubs within the US, the UK, Germany, the Netherlands, Singapore and Australia — affords free to low-cost internet hosting providers resembling area itemizing, enterprise options and e mail internet hosting.

Dennis Macharia, an online designer at Rynode Solutions Ltd, mentioned SiteGround’s internet hosting for web sites resembling WordPress and Joomla is in style with Kenyan micro-enterprises due to quicker buyer assist and stronger uptime, not like a few of its opponents.

“It’s a big loss for micro-enterprises wanting to set up online,” he instructed the Business Daily.

“SiteGround is one of the best worldwide and whenever I have issues with client’s account, they respond fast while other platforms do not even offer customer support.”

The Kenya Revenue Authority (KRA) is focusing on about 1,000 companies “deriving or accruing income” from Kenya by means of a digital market to register in six months by means of June 2021, focusing on Sh5 billion.

“The way the taxes have been structured lately, the likely effect is that they will lower the eventual tax throughput to the KRA,” Kamotho Njenga, secretary-general for ICT Association of Kenya, mentioned.

“The taxman may think they are getting innovative, but they may be doing a disservice to their bottom line collection because not every investor will go public on why they have … left a given destination.”

Some of the nations which have enforced or are planning to implement digital service taxes embrace India, Italy, France, the UK, Mexico, Hungary, Austria, Czech Republic, Turkey, Belgium and Spain.

Related Articles

Leave a Reply

Back to top button