Digital Service Tax (DST) is an impressive step for Kenya to be in effect from Jan 1st, 2021. Tax will be charged at a low rate of 1.5 % of the gross transaction value according to the finance act of 2020.
The new digital revenue-based tax regulations will apply to the resident or non-resident person with a permanent residence in Kenya.
A few digital services to which tax will apply includes buyers and sellers, online ticketing, downloading of digital contents like music and streaming, media-based subscription-like e-journals, and digital currencies transactions.
Kenya’s policymakers notify that the new tax plan will put a small effect on digital services startups in the region.
According to Kenyan Revenue Authority(KRA), those residents and countries having companies and offices inside Kenya will notice their DST offset against any income tax collect through the year, as for non-resident and not domiciled companies in the country, DST will accept as a final tax payment.
It will step up the righteous business case for international commerce as practiced in Kenya. In an ongoing implementation of DST launch procedure, KRA has placed essential measures, ranging from shareholder commitment to system improvement, to ensure implementations. The measure will help taxpayers, who will need support in case of technical or any other.