The Kenya Revenue Authority (KRA) in a new shift of focus, turns to high-end beauty parlors, hair stylists, barbershops and even taxi operators, in a bid to net ‘billions hidden’ in the informal sector.
Reports show that multiple owners of such beauty establishments have started withholding 5% of the commissions they pay to their staff/attendants and submit to KRA, which the employees find unfair as it further reduces their already low earnings.
The taxman is reportedly hitting all daily transactions with 16% VAT while commissions earned by independent contractors, including barbers, nail technicians, hair stylists and others without employment contracts are being slapped with a 5% withholding tax.
This means that all commission-based staff are required to submit their individual KRA PINS.
The beauty operators allege KRA officials have been presenting themselves as customers visiting their establishments and ask for services while collecting intel on average income of the businesses.
Similarly, most taxi-hailing apps including Uber, have started charging drivers on their platforms a 16% VAT.
This means that for a ride of KSh. 1,000.00, Uber will take KSh. 180 as commission plus VAT on the commission of KSh. 28.80, leaving the total retained by the platform to KSh. 208.80.
