Working in Diaspora? Get to Know More About Digital Tax Introduced in Kenyan Tax Regime

[TheKamams]

Many business people doing transaction via online platform feels that the newly introduced digital service tax is going to undermine their services analyst says.
Most of business people feel that the tax will decrease their income saying it's favoring the rich and not the poor in the society. The digital tax which took effect as from 1st January 2021 under the rate of 1.5% of the total value of business services rendered through digital marketplace.
The DST as it is commonly known will be charged on the gross transaction value of the service which shall be in the case of provision of digital services, the payment received as consideration for the services; and in the case of use of a digital marketplace, the commission or the fee paid to a the digital marketplace provider for the use of the platform.


Digital service tax will be payable by a resident or non-resident with a permanent establishment in Kenya and shall be offset against the tax payable by that person for that year of income. DST paid by non-resident person without a permanent establishment in Kenya on income derived or accrued through the digital marketplace shall be the final tax.
According to KRA,DST and VAT shall be applicable in cases where the digital service or supply on digital marketplace is provided to a user located in Kenya. A user shall be deemed to be located if payment of the digital service is made using a credit or debit facility provided by any financial institution or company in Kenya. If a user access the digital interface from a terminal that is electronic gadgets located in Kenya or the supplies or digital services are acquired using an internet protocol address registered in Kenya or an international mobile phone country code assigned to Kenya and finally if a user has a business, residential or billing address in Kenya.
Those online services that will be affected by the DST are online services like E-learning platforms, Website providers,Jumia, Kilimail, Glovo, Netflix, Amazon, Website hosting like zoom, WebEx and skype, downloadable digital content like films, music and movies, software programmes and many more.