The Kenya Revenue Authority (KRA) says that it aims to collect KSh5 billion from the digital economy by June 2021. According to Commissioner-General Githii Mburu, the new tax collection will target local and foreign firms offering digital services and goods in Kenya.
The Finance Act 2020 introduced a 1.5 percent digital service tax for online transactions, sale, and services that kicks off on January 1, 2021.
Firms targeted by the taxman in the draft VAT law include mobile phone operators who sell downloadable digital content including mobile applications, e-books, and movies; subscription-based media including news, journals, magazines, streaming of TV shows and music, podcasts, and online gaming and software programs including downloading of software, website filters and firewalls.
Furthermore, firms that sell tickets for live events, suppliers of distance teaching via pre-recorded medium or e-learning and suppliers of digital content are also expected to adhere to the new tax rules
Mburu added that the digital economy has recorded significant revenue growth with Treasury estimating that the sector generated Ksh427 billion in 2019. KRA will work closely with the Central Bank of Kenya and the Communication Authority of Kenya to nab tax cheats.
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