President Uhuru Kenyatta has given Kenya Revenue Authority a green light to start collecting the proposed 1.5 per cent digital services tax from local and multinational companies beginning January 2021.
The president on Tuesday assented to the Finance Bill 2020, setting stage for the implementation Value Added Tax (Digital Marketplace Supply) Regulations, 2020 draft.
Companies in the digital space will now have to pay 1.5 percent of their gross sales to the taxman.
The law defines “digital marketplace supply” as any supply of a service made over a platform that enables the direct interaction between buyers and sellers of services through electronic means.
Here is a list of what will be taxed from January 2021.
- Downloadable digital content including downloading of mobile applications, e-books and movies;
- Subscription-based media including news, magazines, journals, streaming of TV shows and music, podcasts and online gaming;
- Software programs including downloading of software, drivers, website filters and firewalls;
- Electronic data management including website hosting, online data warehousing, file-sharing and cloud storage services; (e) Supply of music, films and games;
- Supply of search-engine and automated helpdesk services including supply of customized search-engine services;
- Tickets bought for live events, theaters, restaurants etc. purchased through the internet;
- Supply of distance teaching via pre-recorded medium or e-learning including supply of online courses and training;
- Supply of digital content for listening, viewing or playing on any audio, visual or digital media;
- Supply of services on online marketplaces that links the supplier to the recipient, including transport hailing platforms;
- Any other digital marketplace supply as may be determined by the Commissioner.