The effects of Kenya’s newly adopted digital tax that commenced in January 2021 are starting to be felt. Google, Facebook, Uber and a number of online businesses already reviewed their prices upwards as the Kenya Revenue Authority (KRA) makes good of its plans to tax all online businesses.
A Bulgarian based webhosting company, SiteGround has pulled out its services from the Kenyan market citing high compliance costs. The firm said it will no longer sign up Kenyan businesses which have been flocking to the site for its affordable quality services.
“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 web designer, who had unsuccessfully sought to sign up an account for a client, via Twitter.
Read: KRA Updates iTax System To Enable Digital Tax Collection Set To Commence in January 2021
“Complying with said regulations would be expensive for us, making offering our product there not feasible for us.”
SiteGround has data hubs in the US, UK, Germany, the Netherlands, Singapore and Australia. The company offers a range of low cost solutions including domains, enterprise solutions and email hosting.
A few people however alleged that the company was racist hence their pulling out of Kenya. To this, they responded that they had pulled their services from a number of countries.
1/2 A couple of months we decided to stop offering new signups in several countries as mentioned in the original tweet but this has nothing to do with Kenya as a country.
— SiteGround (@SiteGround) May 4, 2021
2/2 We respect everyone regardless of race, gender, or class. The decision was mainly due to the rapid legal and tax-related changes in several regions that made offering our services there not feasible.
— SiteGround (@SiteGround) May 4, 2021
SiteGround is particularly popular for WordPress and Joomla websites that are common in Kenya. Their services are particularly popular due to faster customer support and stronger uptime.
Read also: How to Create A Website in Easy Steps
“It’s a big loss for micro-enterprises wanting to set up online,” Dennis Macharia, a web designer at Rynode Solutions Ltd told 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.”
KRA is targeting Sh5 billion from 1,000 businesses that accrue revenue from Kenya’s digital marketplace.
“The way the taxes have been structured lately, the likely effect is that they will lower the eventual tax throughput to the KRA,” Secretary-general for ICT Association of Kenya, Kamotho Njenga said.
“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 ”
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