Earning a living in Kenya just became harder, have something you want to sell on the Facebook market place? you will now be required to pay a digital service tax for it.
Digital Service Tax in Kenya
Starting January 2021, Kenyans or businesses who earn on digital platforms like social media will be required by law to pay a 1.5pc tax on all of the income generated through digital transactions.
The Statement by the Kenya Revenue Authority (KRA reads that the Finance Act 2020 introduced a new tax known as Digital Service Tax (DST) which became effective on 1st January 2021.
DST is charged at 1.5pc of the gross transaction value and shall be payable by any person whose income from service is derived from or accrues in Kenya through a digital market place.
”For goods sold on digital or social media platforms, the suppliers are required to declare the income earned under the self-assessment regime provided under the relevant Tax Laws.” Said KRA
The money shall be due at the time of transfer of payment for the service to the service provider.
For residents and companies with a permanent establishment in Kenya, the DST will be offset against the income taxes due in the year of income while non-residents and companies without a permanent establishment in Kenya will pay the Digital Service Tax as a final tax.
Read more about the tax here
