Kenyan Government will soon join the list of many other developed countries who subject foreign online streaming media services such as YouTube and Netflix to taxes.
The ICT Ministry said that it is developing a framework which will ensure the services declare the incomes they derive from the Kenyan consumers.
Communications Authority director-general Francis Wangusi said that the technologies that will facilitate taxation of Over The Top services are available, the OTT services include all applications that offer voice and messaging services over the internet.
Mr Wangusi further said that all foreign advertisements that air in the Kenyan market will also be subjected to tax.
He raised concern on how these online content providers exploit the Kenyan industry, this comes amid various complaints from Kenyan Youtubers who decry low pay from the service.
“Many countries especially developed ones have policies that guide these services, and that is where we are heading to as a country.
In a similar move, the Kenya Revenue Authority has said that it will soon seek income tax from income-generating digital applications, those that sell goods and services and those that require users to pay before downloading.
The taxman said that it will liaise with Communications Authority of Kenya (CA) to obtain transactions data by resident and foreign-based app developers doing business in Kenya.
Under the Value Added Tax (VAT) Act 2013, provision of online platforms for use by third-parties falls under the taxable supply and it attracts a 16 percent levy.
“If you are a resident here, you are supposed to pay the taxes the normal way. If you are not a resident but you have an app that’s being used here, your tax representative (a requirement under Section 16 of Tax Procedures Act) must pay your VAT and income tax,” KRA deputy commissioner for corporate policy, Maurice Oray said.
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