In an effort to boost the digital economy, the government has proposed a barrage of tax relief measures for the industry in the Finance Bill 2025, passed by the cabinet on Wednesday, April 29.
Among the taxes to be scrapped in the sector is the 1.5 per cent Digital Service Tax (DST)-this is the type of tax imposed on income accruing from a business carried out over the internet or an electronic network, including through a digital marketplace.
The tax, which is exclusive of Value Added Tax (VAT), is charged on the gross transactional value and only applies to non-resident digital providers without a permanent establishment in Kenya.
A wide range of digital services falls under this category, including streaming services like Netflix, downloadable digital content, digital marketplaces like Facebook Marketplace, and subscription-based media.
