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Pain as Zoom Starts Charging Kenyan Users VAT



Counting both free and paying users, Zoom has over 300 million daily meeting participants. [Photo/ Digital Information World]

Businesses in Kenya using Zoom’s paid tiers will have to fork out more to use the video conferencing service for their meetings, after the firm announced that it would begin charging Kenyan VAT “on or shortly after August 1, 2021” on its supplies to customers in Kenya.

In an e-mail sent to its customers in Kenya and seen by Business Today, the firm highlighted its growing international presence and the need to meet its indirect tax collection and remittance obligations.

“The application of these taxes to businesses with online activities is a complex and evolving area. Zoom continues to review such developments, as well as the nature and extent of its activities in different jurisdictions, and, based on such regular review, will start charging indirect taxes where applicable,” the message read in part.

While many Kenyan users of Zoom use the basic plan, which is free, many larger businesses among other organizations and governmental agencies pay between $150 (Ksh15,148) and $240 (Ksh25,968) for licenses.

The premium plans – Pro, Business and Enterprise – offer perks including the ability to host up to 1000 participants in a meeting, social media streaming, cloud storage and longer meeting times unlike the Basic Plan which has a 40-minute time limit for group meetings.

The service has found prominence since the onset of the Covid-19 pandemic, becoming the most used video conferencing application in the world.

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Counting both free and paying users, Zoom has over 300 million daily meeting participants, up 2900% from December 2019 when the platform had 10 million daily meeting participants.

As a matter of fact, it has reported a quarterly revenue increase in every quarter for which data is available from Q1 FY 2018.

As offices and learning institutions were closed in Kenya due to the pandemic, Zoom became the go-to platform for everything from work meetings to university lectures.

The trend was replicated around the world as during 2020 alone, Zoom’s business customer base grew by 470.33% with the company issuing 385,200 new licenses for its paid tiers.

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Kenyan Digest