Social Media Influencers To Pay Tax Under New KRA Digital Service Tax Law!

by Muthoni Kimani
January 20, 2021

The government now expects social Media Influencers to pay tax after the Kenyan tax collecting body Kenya Revenue Authority(KRA) recently issued a statement indicating that they will not be exempted under the newly imposed Digital Service Tax(DST)

In a public notice, KRA noted that an increasing number of influencers who do not file tax returns or pay taxes on transactions;

Social media influencers will be liable to pay digital service tax since their income is derived from or accrued from providing services through a digital marketplace or by providing digital advertising services in Kenya.

In a statement, the tax collection unit argued that a social media influencer is a person who commands a following through a media platform through the products or services they use or engage in to drive sales or fame.

The Finance Act 2020 introduced DST on income from services provided through Kenya's digital marketplace and will be applied at 1.5 per cent on the gross transaction value (exclusive of VAT). "Kindly note the tax will be collected and remitted by agents appointed by the commissioner of Domestic Taxes," KRA added.

In early January, KRA reported that it aims to collect about Ksh 5 billion from DST between January and June. Individuals and companies offering digital services would be required to pay 1.5% of the gross transaction value.

The regulations have elaborated the array of transactions taking place on digital platforms that attract the tax. Many Kenyans argued that social media influencers in the country do not earn much. In some instances push political agenda further questioning if the politicians themselves would incur the tax.