REGULATION | The Kenya Revenue Authority Nets ~$8.5 Million from Digital Tax in 21 Months – Includes Crypto Taxation

The Kenya Revenue Authority (KRA) has collected KES 1.1 billion (~$8.46 million) from the Digital Service Tax (DST) since its implementation in January 2021, highlighting the growing significance of the digital economy as a tax base.

Data from the National Treasury shows that the DST generated KES 241 million (~$1.86 million) in the six months to June 2022, bringing total collections since inception to over KES 1.1 billion by September 2022.

The tax, introduced under the Finance Act 2020, targets income earned by non-resident companies offering digital services in Kenya, including streaming platforms, ride-hailing apps, and online marketplaces.

Initially set at 1.5 percent of gross transaction value, the rate was reduced to 1.5 percent of turnover following an amendment in the Finance Act 2022, and is applicable to both residents and non-residents.

The KRA has since set up a framework to register non-resident digital service providers and appointed tax agents to ensure compliance. Major global platforms such as Google, Meta (Facebook), and Netflix are among those expected to remit DST.

The digital tax is part of a broader push by the government to expand its tax base and capture revenues from the fast-growing digital economy. The Treasury projects that DST collections will continue to rise as more platforms come under the tax net and compliance improves.

While some stakeholders have expressed concerns over double taxation and the potential impact on digital business growth, the government maintains that the DST is a fair way to ensure all businesses operating in Kenya contribute to public revenue.

For crypto traders and exchanges, KRA originally required them to pay the digital assets tax (DAT).

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