Netflix, Uber, Spotify Prices To Go Up As Kenya Plans To Raise Digital Service Tax To 3pc
Kenya introduced the Digital Service Tax (DST) back in January last year requiring companies that sell and buy goods and services online to pay a 1.5pc tax. Now, the rate is set to be increased to 3% in a bid to boost domestic revenue and reduce the country’s fiscal deficit.
The increased rates recommended by the Treasury Department in the country’s Finance Bill are expected to be approved by MPs meaning tech companies like Amazon, Uber, Spotify, and Netflix saw their prices rise because of the change will likely review the prices again.
“The move is in line with what the rest of the world is doing, most Western countries have an average rate of 3%. It Is fairly standardized and it’s aimed at mobilizing more revenue from multinational companies who in the past have not been accounting for tax on services consumed on digital tax,” ICPAL committee member Mokaya Karaya said.
Digital Service Tax (DST) is payable on income derived or accrued in Kenya from services offered through a digital marketplace and should be made on or before the 20th day of the following month that the digital service was offered.
Taxes for non-residents in Kenya, East Africa’s largest economy, must be paid if they “supply or enable the provision of a service for a user who is located in Kenya.” Services including video streaming and podcasts, subscription-based media such as news, digital markets, and downloads of digital content such as ebooks and films are all included in the country’s revenue authority’s definition of taxable services.