On 5 May 2020, the Kenya government published the Finance Bill, 2020 that includes a proposal for digital services tax and minimum tax. The bill proposes that income from services earned through a digital marketplace in Kenya will be taxed at the rate of 1.5% on the gross transactional value.
The tax on digital services deducted from resident companies and branches is treated as advance tax, which can be offset against the tax payable for the income year. In order to expand Kenya’s tax base, the Finance Act also proposes the introduction of a minimum tax. The minimum tax is levied on 1% of gross income and is payable on the 20th day of the fourth, sixth, ninth and twelfth months.
