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Government to tax foreign online streaming platforms like Netflix and YouTube

Mandatory Credit: Photo by Paul Sakuma/AP/REX/Shutterstock (6285826a) The Netflix logo is displayed at the company's headquarters in Los Gatos, Calif. Netflix has enjoyed top billing before: it was the biggest gainer in the S&P 500 in 2010 and 2013, and more than tripled in value both years. But another big year in 2015 pushed the company's value past established media rivals like CBS and made it about the same size as Time Warner YE Financial Markets Winners and Losers, Los Gatos, USA

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.

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