NAIROBI, Kenya, Nov 2 – The Treasury has proposed a 6 percent Significant Economic Presence Tax (SEPT) targeting digital firms in Kenya, including ride-hailing, food delivery platforms, and freelance services.
SEPT aims to replace the current Digital Service Tax, increasing the rate from 1.5 percent to 6 percent for non-resident entities generating income through Kenyan digital marketplaces.
“This tax shall be payable by a non-resident person whose income from services is derived from or accrues in Kenya via a digital marketplace,” Treasury Cabinet Secretary John Mbadi announced.
The SEPT is intended to align Kenya’s digital taxation practices with international standards, ensuring that foreign companies benefiting from the Kenyan economy contribute fairly.
Additionally, the legislation introduces a Minimum Top-Up Tax, mandating a 15 percent minimum effective tax rate for multinational enterprises (MNEs) with annual turnovers above Sh100 billion.
Companies below this rate will need to “top up” their tax obligations to meet the minimum threshold, aiming to counter tax base erosion.
The changes reflect the Kenya Revenue Authority’s efforts to modernize tax laws and enhance contributions from multinational corporations.
