Economy

KRA Now Targets Airbnb to Ensure Tax Compliance Among Kenyan Hosts

Data obtained from Airbnb would help KRA map out additional rental properties in Kenya

November 8, 2023
48 2 minutes read
KRA Now Targets Airbnb to Ensure Tax Compliance Among Kenyan Hosts
A KRA Revenue Service Assistant RSA attending to a businesswoman in Nairobi on September 27 2023

The Kenya Revenue Authority (KRA) has taken a significant step towards ensuring tax compliance among Kenyan hosts on Airbnb, the popular online marketplace for short and long-term homestays.

The KRA has formally requested transaction data from Airbnb for the period starting January 1, 2021, to December 31, 2022.

This move is part of a broader effort by the KRA to crack down on tax evasion, particularly among those who have been able to avoid paying taxes on income earned through the platform.

Airbnb Ireland UC, which serves as the data controller for the personal data of all users of Airbnb Kenya, has revealed the demand from the tax man.

The disclosures are expected to identify hosts and details of their earnings on the platform.

Airbnb Ireland said in a statement that “KRA has issued an exchange of information request to the Irish Tax Authority-Irish Revenue, seeking certain information on Kenya hosts, and Irish Revenue has formally requested Airbnb to share this information, which we are legally obliged to.”

This action by the KRA underscores the increasing scrutiny faced by digital platforms and their users in terms of tax compliance.

As more economic activity moves online, tax authorities worldwide are seeking ways to ensure that digital platforms, and those who earn income through them, are paying their fair share of taxes.

The KRA’s move is in line with these global trends and reflects the growing importance of digital platforms in Kenya’s economy.

However, this development also raises questions about privacy and data protection.

While the KRA’s request is aimed at ensuring tax compliance, it also involves accessing potentially sensitive personal and financial information. This highlights the need for clear guidelines and safeguards to protect the privacy of Airbnb hosts and users.

The request for transaction data from Airbnb also signifies a shift in the way tax authorities are adapting to the digital economy.

Traditional methods of tax collection may not be effective in the context of online platforms like Airbnb, which operate across borders and involve numerous individual hosts.

This situation calls for innovative approaches to tax collection, such as the exchange of information between tax authorities in different countries.

KRA’s request for transaction data from Airbnb is a significant development in Kenya’s efforts to ensure tax compliance in the digital economy. It reflects the challenges and opportunities presented by digital platforms like Airbnb, and the need for a balanced approach that ensures tax compliance while also protecting privacy and promoting economic growth.

November 8, 2023
48 2 minutes read
Monitor Your Business Transaction
Photo of Lawrence Baraza

Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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