The Treasury has announced a proposed 6 percent Significant Economic Presence Tax (SEPT) targeting digital firms operating in Kenya, including ride-hailing, food delivery services, and freelance platforms.
The SEPT is designed to replace the existing Digital Service Tax, raising the rate from 1.5 percent to 6 percent for non-resident entities generating income through Kenyan digital marketplaces.
Treasury Cabinet Secretary John Mbadi stated that the tax will apply to non-resident individuals whose income from services is derived from or accrues in Kenya via these digital platforms.
The aim is to align Kenya’s digital tax practices with international standards, ensuring that foreign companies benefiting from the Kenyan economy contribute fairly.
In addition, the new legislation introduces a Minimum Top-Up Tax, requiring multinational enterprises (MNEs) with annual revenues exceeding Sh100 billion to maintain a minimum effective tax rate of 15 percent.
Treasury CS John Mbadi.
Companies that fall below this rate will need to “top up” their tax payments to meet the minimum threshold, addressing concerns over tax base erosion.
