The book business is a very exciting one to be involved in at any one time. The excitement however has just gone down a little notch for Nairobi based book lovers with changes in the tax code. Previously the book was a zero rated product which meant that it did not attract the 16% Value Added Tax (VAT) on most products we use. With the new changes this means that the price of books will be going up 16% which can’t be fun for book lovers.
Its not just where the price of books where there are changes. Our good friend Ng’ang’a Mbugua informs us that he has recently discovered that one now has to register with the Kenya Revenue Authority as a tax agent. This is when one wants to supply books to book shops. To do this one needs to go to the KRA website and follow the instructions as required. The thing to watch out for would be the “professional body” that one belongs to so that one gets the required accreditation. Alongside registering to be a tax agent one must get an ETR machine that allows one to give receipts to the bookshops as you sell them your product. This is a machine which the Capital FM Classifieds page says starts from Kshs23,000 in price won’t be ideal if you are starting out.
The people who would be most affected by this new requirement are those who publish and distribute their own books as it is a new cost one has to incur. The upside of it all is that it increases tax compliance where one is selling books and avoids one getting on the wrong side of the law.