This archive report was first published on 30 June 2020.
On June 30, 2020, the Kenya Revenue Authority (KRA) took a significant step towards taxing digital transactions by launching a special unit to track revenues from digital platforms.
The new unit aims to ensure that digital market players pay their fair share of taxes, as announced in the Draft Finance Bill.
Criteria for Digital Tax ¶
The 1.5% tax applies to companies that use the internet for marketing or selling products, as well as internet companies without a physical presence in Kenya but earning income from their activities here, such as Netflix.
The tax extends beyond businesses to include services paid via a Kenyan bank, SIM card, or bank card, covering downloadable materials like books and movies, software, distance learning, tickets for live events, and other digital content.
However, tracking all transactions on digital platforms poses a challenge, necessitating the creation of a digital tax unit.
We intend to use transaction tracers through data-driven detection in taxing multinationals as we roll out taxes on digital businesses. — KRA Deputy Commissioner Caxton Masudi
