This archive report was first published on 7 June 2020.
On June 7, 2020, the National Treasury published a draft law aimed at widening the tax net to include firms engaged in the digital space.
As social distancing measures shift activity from brick and mortar to electronic platforms, the Treasury has identified the digital segment as a key area to tap into for revenue.
The draft VAT (Digital Marketplace Supply) Regulations 2020 target firms and individuals involved in the supply of services over digital platforms, including mobile phone operators, subscription-based media, and online gaming and software providers.
The regulations also cover electronic data management services, supply of music, films, and games, and search-engine and automated help-desk services.
Firms selling tickets for live events, theaters, and restaurants purchased through the internet, as well as distance teaching and online courses, are also expected to adhere to the new tax rules.
The Kenya Revenue Authority invites players in the digital space, tax professionals, and the public to submit comments on the draft regulations by June 15, 2020.
Individuals who fail to comply with the provisions of these Regulations shall be liable to a restriction of access to the digital marketplace in Kenya until such obligations are fulfilled.
