KEPSA through the Ajira Digital team participated in a virtual Tax Workshop for Online Workers on 10th December 2020. The forum sought to sensitize the online workers on their tax obligations, the new regulations that include the Digital Service Tax (DST), and how the digital tax will impact their work. The training brought together online workers, sellers, online-based companies, developers, and digital marketers in the e-commerce sector. The workshop was hosted by Grant Thornton and the Online Professional Workers Association of Kenya (OPWAK).
The Finance Act 2020 introduced DST on income from the provision of services through a digital marketplace, as defined by the Income Tax Act. The tax will be charged at a rate of 1.5% of the gross transaction value and is due at the time of transfer of the payment for the service to the service provider.
For companies with a permanent establishment in Kenya, DST will be an advance tax to be offset against the income taxes due in the course of the financial year. In the case of non-residents and companies without a permanent establishment in the country, the digital services tax will be the final tax.
The Digital Service Tax comes into effect from January 2021 and will apply to residents and non-residents persons provided the income is derived or accrued from Kenya from the provision of services through a digital marketplace.