Subscription-based media such as news and magazines and online ticket sales are among services that will attract the 1.5% Digital Service Tax on gross transaction value, which took effect on 2 January 2021.
A comprehensive list by the Kenya Revenue Authority (KRA) shows that the agency will also charge the tax on digital content such as mobile apps, films and e-books.
Other items that will attract the Digital Service Tax include:
- Over the top streaming services, including TV shows, films, music, podcasts, among other forms of digital content.
- Sale, licensing or any form of monetising data collected from Kenyan users.
- Online distance training through prerecorded media or e-learning platforms and courses.
- Provision of search engine services and automated held desk services such as automated instant feedback services, chatbots, remote support, and service desks, including customised search engine services.
- Any other service provided through a digital marketplace.
The Digital Service Tax will increase the cost of popular content services such as Netflix and Spotify, which will now attract an additional 1.5% tax on gross transaction value.
Online services from the government and online services that facilitate payments, lending, or trading of financial instruments, commodities, or foreign exchange, carried out by a licensed financial institution or financial services provider will not attract the Digital Service Tax.