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Kenya's digital tax kicks in

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Streaming services and a wide range of content and digital services providers in Kenya will now have to pay tax after the Kenya Revenue Authority's (KRA's) new digital service tax (DST) officially came into effect at the beginning of January 2021.

A number of local media outlets have reported that the DST has officially kicked in with Nairobi News quoting the authority saying that the new tax will apply to anyone whose income from services "is derived from or accrues in Kenya through a digital market place".

The Finance Act 2020 introduced the new digital tax which is charged at 1.5% of the gross transaction value.

The Kenyan government has been looking into ways to tax over-the-top (OTT) players and foreign online streaming media services like YouTube and Netflix since mid-2019.

The draft regulations published last year explained that the digital service tax would be applicable to services including: streaming and downloadable services of digital content; digital marketplaces; search engine services; subscription-based news, digital transport platforms; as well as website hosting, online data warehousing, file-sharing and cloud storage services.

The tax even stretches to tickets bought for live events, theatres and restaurants which were purchased through the Internet and e-learning and online courses.

The authority will restrict these types of businesses from operating in the Kenyan market if they fail to comply with the regulations.

The Staff, Connecting Africa

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