Kenya’s 1.5% digital services tax for Netflix, Uber to take effect in January


Kenya's 1.5% digital services tax for Netflix, Uber to take effect in January
FILE PHOTO | President Uhuru Kenyatta signs into law the Supplementary Appropriation Bill on June 18, 2019. PHOTO | PSCU

The operation of the 1.5 percent digital services tax levied on gross sales by online businesses such as Netflix and Uber is set to take effect early next year.

This after President Uhuru Kenyatta assented to the 2020 Finance Bill on Tuesday.

Other passed tax proposals expected to take effect on January 1, 2021 include the the extension of the upper limit of the residential income tax paid by landlords from Ksh.10 million to Ksh.15 million.

Notable taxes taking effect immediately include the lowering of the threshold on excise duty charged to beer and spirits by alcohol strength from over 10 percent to six percent, a factor set to raise the prices of some beers and spirits.

The controversial one percent minimum tax on the gross turnovers of loss making firms is also included as part of the bill.

Both the President and the National Assembly agreed with Treasury’s plan to moot loopholes in tax mobilisation.

In total, the bill has sort to raise Ksh.38.9 billion in new tax revenues to further anchor funding for the Ksh.2.79 trillion net spending by government in the new financial year commencing July 1.

The Bill, now an Act of Parliament further contains the Ksh.56.6 billion economic stimulus package that contains key funding on eight thematic areas including tourism and SMEs as measures to guide the economy’s rebound.

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Story By Kepha Muiruri
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