If Parliament proposes a 6% tax on gross turnover for non-resident companies, Bolt and Uber have threatened to shut down their operations in Kenya.
The right name for the proposed tax is Significant Economic Prescence Tax, but you can call it SEP Tax, like SEPTIC.
The National Treasury has said they’re seeking to impose the SEP Tax, which shall be payable by a non-resident person whose income from the provision of services is derived from or accrues in Kenya through a business carried out over a digital marketplace.
The bill aims to replace the 1.5% Digital Service Tax (DST) with a 6% SEP tax.
Bolt Africa Tax Manager Celia Kuria told the Finance and Planning Committee chaired by Molo MP Kimani Kuria that should the SEP tax be imposed, Bolt is going to be taxed at 22% on the topline, in addition to a commission capped at 18% and a VAT at 16%, which will see its earnings from a Sh500 ride drop from a profit of Sh1.40 to a net loss of Sh2.
She reminded Kimani Kuria not to forget that several multinational companies, including Microsoft, GlaxoSmithKline, and Unilever, closed their doors and left Nigeria after the introduction of a similar SEP tax.