Beginning this month, businesses operating on a digital platform will pay a 1.5% tax on income generated through digital transactions.
DST is charged at 1.5% of the gross transaction value and shall be payable by a 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 tax shall be due at the time of transfer of payment for the service to the service provider.
The statement released from the office of the Commissioner for Domestic Taxes indicates that 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.
For non-residents and companies without a permanent establishment in Kenya, the Digital Service Tax will be a final tax.