Kenyans To Pay More For Netflix After 16% VAT Inclusion

By Juma / Published May 7, 2021 | 8:12 am




KEY POINTS

Kenyans are now paying more for Netflix subscriptions after the company moved to include the 16 percent Value Added Tax (VAT) in its charges.




Kenyans are now paying more for Netflix subscriptions after the company moved to include the 16 percent Value Added Tax (VAT) in its charges to meet the demands from the Kenya Revenue Authority (KRA).

Netflix has reviewed its rates from 950 shillings to 1,100 shillings for the standard package and to 1,450 shillings from 1,200 shillings for the premium package. Most users now say they are rethinking other service providers with similar content.

Netflix is a streaming service that offers a wide variety of award-winning TV shows, movies, anime, documentaries, and more on thousands of internet-connected devices.

“You can watch as much as you want, whenever you want without a single commercial – all for one low monthly price. There’s always something new to discover and new TV shows and movies are added every week,” the company says on its website.

The price hikes which take effect from the end of May do not affect subscribers under the basic plan currently paying 700 shillings. “Starting May 30, a value-added tax (VAT) will be included in your Netflix price,” read the company’s message to subscribers.

The Digital Service Tax (DST) came into force on January 1 and was introduced to both the Income Tax Act (ITA) and the Value Added Tax Act (VAT).

Both Acts prescribe that DST shall be payable by a person whose income is earned in Kenya from the provision of services through a digital marketplace.

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The Kenya Finance Bill 2020 introduced a new Digital Services Tax on income from services provided through the digital marketplace in Kenya at the rate of 1.5 percent on the gross transaction value.

The DST will apply to the income of a resident or nonresident person derived or accrued in Kenya from the provision of services through a digital marketplace. One will be subject to DST if one provides or facilitates the provision of a service to a user who is located in Kenya.

A user of a digital service is deemed to be located in Kenya if any of the following parameters are present; he/she accesses the digital interface from a computer or other electronic devices located in Kenya; payment for the digital services is made using a credit or debit facility provided by any financial institution or company in Kenya; the digital services are acquired using an internet protocol address registered in Kenya or an international mobile phone country code assigned to Kenya; and/or the user has a business, residential or billing address in Kenya.

The new tax will affect such digital services as streaming and download services of digital content; provision of a digital marketplace, website, or other online applications that link buyers and sellers; subscription-based media including news, magazines, and journals; electronic data management including website hosting, online data warehousing, file-sharing, and cloud storage services; Supply of search-engine and automated help-desk services including supply of customized search engine services; among others.





About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

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