Kenya Revenue Authority Announces Plans To Potentially Tax Netflix And Other OTT Businesses

The Kenya Revenue Authority (KRA) is preparing a policy that could tax Over-The-Top (OTT) non-resident subscription-based services, such as Netflix and Hulu, that charge users on a monthly basis.

Speaking at an online tax forum hosted by the KRA, Githinji Gathirwa, a manager at the policy unit of KRA, said that the biggest challenge with the taxing of non-resident organisations is their visibility at the point of payment.

The comments have been made following a recent push by Kenya's government to strengthen control over e-commerce service providers – especially those who fail to file tax returns.

On 3 May 2019, the KRA gave a warning to digital operators and "all other individuals who sell products on e-commerce platforms" to declare their revenue and also pay tax.

Timothy Munene, a member of the Online Professional Workers Association of Kenya, said that the digital space is the future, and online entrepreneurs will only grow if they are seen as formal entities and if the business environment in Kenya is friendly for them.

He added that he urges the authority to introduce a policy of friendly taxes for online traders in order to help ensure compliance.

This isn't the first time that the Kenyan government has placed focus on OTT operators.
In 2016, the authorities announced the introduction of the Film, Stage Plays and Publication Act 2016 for the regulation of content from the likes of Netflix and Hulu.

However, the legislation was never implemented.

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