RWK Financial Compass

  Significant Economic Presence Tax in Kenya: A New Era for Digital Businesses . This newsletter provides an overview of the recently enacted Significant Economic Presence (SEP) Tax in Kenya, which has replaced the previous Digital Service Tax (DST). What is SEP Tax? SEP Tax is a tax levied on non-resident businesses that derive income from Kenya through digital platforms, even if they don't have a physical presence in the country. It aims to ensure that digital businesses contribute to the Kenyan economy. SEP Tax will replace the Digital Service Tax (DST), which was introduced in the Finance Act, 2020, and became effective in January 2021. The previous DST targeted 1.5% of gross transaction value and applied to both Kenyan and foreign digital service providers.

  As of February 1, 2025, significant changes to the National Social Security Fund (NSSF) contributions will take effect, impacting salaried Kenyans and their take-home pay. Here’s a detailed overview of these changes and their implications for taxpayers.

  In this edition of the RWK Africa newsletter, we provide a comprehensive breakdown of the Digital Service Tax (DST) in Kenya – its scope, requirements, implications, and how businesses can stay compliant with the latest tax regulations. What is the Digital Service Tax (DST)? The Digital Service Tax (DST) was introduced by the Kenya Revenue Authority (KRA) under the Finance Act of 2020 and became effective on January 1, 2021 . The primary goal of this tax is to ensure that businesses that generate income from providing digital services within Kenya contribute to the country’s tax revenue.