Digital tax planned to hit Google and Netflix in Kenya

Online taxi-hailing platforms, streaming sites and subscription-based digital newspapers are among marketplace service providers that Kenya plans to tax, according to proposals by its revenue agency.

The proposed levy will be in addition to a 1.5% digital tax on the value of online transactions introduced in the Finance Bill 2020. Companies such as Uber Technologies Inc, Google parent Alphabet Inc and Netflix Inc will be expected to pay tax for services rendered and paid for in the East African nation.

Taxable digital marketplaces services will include downloadable digital content, search-engine services, subscription-based news, streamed shows and music, transport platforms, web-hosting services and other marketplaces as determined by the commissioner, the Kenya Revenue Authority said in the draft legislation.

Companies offering digital services in Kenya will be required to register for value-added tax or appoint a tax representative. Failure to do so risks "restriction of access" to the market, the agency said.

Disclaimer: This article first appeared on Bloomberg.com, and is published by special syndication arrangement."