Kenya plans to begin taxing foreign online streaming media services such as Youtube and Netflix, the communication regulator said on Monday.
Francis Wangusi, director general of Communication Authority of Kenya, told journalists in Nairobi that the government is fast tracking the development of a policy that guide the taxation of the over the top technology that provides content over the internet thereby bypassing traditional distribution channels.
“We can only enforce payment of tax on the strength of a policy,” Wangusi said during the launch of the Star Times local content channel.
Wangusi said that the proposed policy framework will require the foreign entities to declare income derived from Kenyan consumers.
“We can force them to declare and pay and if not, we can shut them down from being accessible in Kenya,” the communications regulator said.
He revealed that the government is able to monitor all online transactions that take place in Kenya.
He observed that the only drawback will be to force foreign companies without local presence from paying taxes for services provided to Kenyans.
The communications regulator said that Kenya will benchmark with developed countries to learn how to successfully implement taxation so that the country can share revenues accrued in Kenya with the content owners.
Wangusi added that it may not be a problem technically to enforce payment of tax by the foreign entities because other countries are doing it.
He noted that the proposed policy framework will also ensure that foreign advertisements that air in the Kenyan market are also subjected to taxation.