Kenyans using online services such as Netflix and Spotify to start paying 16% VAT

Kenyans using online services like movie and music streaming will have to pay 16% VAT starting January 2023.

Multinational firms such as Netflix and Spotify noted they will introduce the 16% Value Added Tax.

This follows a move by the Kenya Revenue Authority (KRA) targeting multinational firms and online service providers to increase the tax base.

President William Ruto had set a target of Ksh. 2.14 for the financial year

The president directed the authority to increase tax collection, to between KSh 4 trillion to KSh 5 trillion.

KRA targeted the growing digital market to increase the tax bracket as it raced to hit Ruto’s revenue target.

Online services including e-books, video conferencing and Zoom meetings will also attract 16% VAT. Zoom Video Communications Company applied the VAT as early as September 2022. Others targeted are the foreign traders benefiting from local firms, which will be required to pay a 15% Withholding Tax.

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