Kenyan influencers are in for a rude shock after the Kenya Revenue Authority (KRA) announced on Monday that they will now have to pay 1.5 percent Digital Service Tax (DST).
The controversial DST came into effect in January 2021.
“Social media influencers will be liable to pay DST since their income is derived from or accrued from the provision of services through a digital marketplace or providing digital advertising services in Kenya,” KRA posted on Twitter.
This comes as a shocker for influencers, many of them young people, who thought the new tax would only target online marketplaces and premium digital content producers like Netflix.
It seems in the quest by the broke Kenya government to raise revenues KRA has forced it to cast its net wider to also capture influencers, many whose earnings are already subject to Withholding Tax.
Kenya Finance Bill 2020 introduced the Digital Services Tax on income from services provided via the digital marketplace in Kenya at the rate of 1.5 percent on the gross transaction value.
DST applies to income of a resident or non-resident derived in Kenya from providing services via a digital marketplace, if on provides or facilitates provision of a service to a user in Kenya.
However, experts say the new measures by KRA will be a major challenge to implement effectively in Kenya due to the lack of adequate guidelines and thresholds.