The ICT ministry is in the final stages of developing a framework that will be used to tax foreign online streaming media services such as YouTube and Netflix.
The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers.
OTT services include all applications that offer voice and messaging services over the internet.
According to a report by Nairobi News, Communications Authority Director-General Francis Wangusi said online content providers exploit the Kenyan industry yet neither the government nor artistes benefit from them.
“Many countries especially developed ones have policies that guide these services, and that is where we are heading to as a country,” Mr Wangusi told the Business Daily, adding that traditional distribution channels have been weakened.
He said technologies that will facilitate taxation of OTT services are available. The proposed policy framework will also ensure that foreign advertisements that air in the Kenyan market are subjected to taxation.
Already, the Kenya Revenue Authority (KRA) has announced plans to collaborate with CA to introduce VAT obligations for app developers trading in Kenya. The taxman will target apps with in-app purchases, those that sell goods and services and those that require users to pay before downloading.