KRA directs social media influencers to start paying Digital Service Tax

Social Media
Social media. [Photo: The Gaps]

Kenyan social media influencers will effectively from January 2, 2020, be required to pay Digital Service Tax (DST) from their income, a directive by the Kenya Revenue Authority (KRA) stated.

KRA said that all digital social media influencer must adhere to the set regulations in the payment of DST.

Social media digital influencer is an individual or group of one or more people who have a strong online presence with huge following. Due this this. He/she is able to drive engagement to masses and promote brands from clients.

In the statement, KRA said that the rate of DST is 1.5% of the gross transaction value.

Further: “In the case of the provision of digital services, the payment received as consideration for the services; and in the case of a digital marketplace, the commission or fee paid to the digital marketplace provider for the use of the platform.

DST will expect tax from digital influencers either on Business to Business (B2B) transaction or Business to Consumer (B2C) transaction.

Social media influencers will be required to pay DST by every 20th day of the month after offering the service.

DST is, however, applicable to those who promote brands and not online sellers.

Should a company or an individual use the services of your online platform such as the website to sell their products, you will effectively enter the DST square by virtue of facilitating engagement between the seller and the buyer.

KRA regards the online platform as a digital marketplace for social media influencers.