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KRA Digital Service Tax: List of Services that will be charged

KRA Digital Service Tax (DST) will be payable through income gained from services provided via digital market place. This move will see social media influencers get a tax cut through their online advertisement of products and services.

The KRA Digital Service Tax was signed by Uhuru Kenyatta through the Finance Act 2020.

In addition, the tax will be payable at 1.5% of the gross transaction value and will be due at the time of payment transfer for the service to the provider.

Likewise, it will be the final tax imposed on non-residents and companies that do not have a permanent establishment in Kenya.

The DST will be collected and remitted by domestic tax agents that have been appointed by the commissioner.

KRA further stated that the DST will be an advance tax that will offset in the course of the year for residents and companies with permanent establishments in Kenya.

According to the tax company, the Digital Service Tax will address the changing business models and also expand the tax base hence ensure neutrality, equity, and fairness. Consequently, this will ensure there in equal taxation between traditional and modern ways of transacting businesses.

HELLO NEWS has highlighted the services that will be taxed under the new DST law;

1. Subscription based media such as news, magazines and journal.

2. Downloadable digital content such as mobile apps, e-books and films.

3. Over the top services which include streaming television shows, films, music, podcasts and any other digital content.

4. Electronic booking or electronic ticketing services such as online sale of ticket.

5. Online distance training through pre-recorded media or e-learning including online courses and training.

6. Provision of a digital marketplace.

7. Provision of search engine and automated help desk services including supply of customised search engine services.

8. Any other service provided through a digital marketplace.

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