This archive report was first published on 2 July 2020.
On July 2, 2020, President Uhuru Kenyatta signed into law the 2020-21 Budget, the 2020 Finance Bill, and the 2019-20 Third Supplementary Budget at State House in Nairobi.
The new laws will see Kenyans pay a 1.5% digital services tax on gross sales by online businesses such as Netflix and Uber, which will take effect in January.
The 2020 Finance Bill has several amendments aimed at cushioning Kenyans from the adverse effects of the COVID-19 pandemic.
Some of the amendments include the zero-rating of VAT on maize, cassava, and wheat flour for six months to make flour more affordable, and the extension of the zero-rating of VAT on cooking gas for one year.
The National Treasury introduced digital tax, a Value Added Tax (VAT) on e-commerce services in the country, targeting consumers who will be forced to pay higher for goods and services procured online.
According to Ukur Yatani, the National Treasury Cabinet Secretary, the Digital Marketplace Supply Regulations, 2020, will see online transactions attract a 1.5% digital tax as the government goes after the growing e-commerce in the country.
The law will also apply to digital news subscription-based media content, including news, magazines, journals, streaming of TV shows and music, podcasts, and online gaming.
Intermediaries who supply digital products on behalf of suppliers will be required to charge and account for the VAT on such supplies, whether the other person is registered for VAT or not.
