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Originally published by The Kenyan Wall Streetbusiness
September 30, 2025
2h ago
KRA Pushes to Have Banks, Clients Withhold Taxes for Non-Compliant Foreign Firms
KRA) is seeking new powers to collect revenue from foreign technology companies, including the ability to order local banks, payment processors and even customers to withhold and remit taxes..
✨ Key Highlights
The Kenya Revenue Authority (KRA) is proposing new regulations allowing it to compel Kenyan banks, payment processors, and customers to withhold and remit taxes on behalf of non-compliant foreign technology companies. These draft Income Tax (Significant Economic Presence) Regulations, 2025, aim to broaden the tax base beyond the lapsed Digital Service Tax.
- Under the proposed rules, about 10% of a foreign firm’s gross turnover from Kenyan users would be considered taxable profit, subject to a 30% corporate income tax, resulting in an effective 3% levy on revenues.
- The KRA plans to target companies like Netflix, Amazon, OpenAI, Airbnb, and Uber, broadening the scope of taxable services to include cloud computing, online education, ride-hailing, and digital asset exchanges.
- This unilateral tax approach by Kenya, while aligning with the global debate under the OECD’s Pillar One framework, risks friction with countries like the U.S. and Europe, which have expressed concerns about such taxes.
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