Kenya: Revenue Authority closed consultation on Draft Income Tax (Significant Economic Presence Tax) Regulations

On 7 October 2025, the Revenue Authority (KRA), on behalf of the Cabinet Secretary for the National Treasury and Economic Planning, closed the consultation on the Draft Income Tax (Significant Economic Presence Tax) Regulations, 2025. Developed under Section 12E(6) of the Income Tax Act (Cap. 470) and the Statutory Instruments Act (Cap. 2A), the draft Regulations outline a taxation regime for non-resident persons deriving income in Kenya through internet-based or digital marketplace services. The framework defines taxable services to include downloadable digital content, subscription media, streaming, software, cloud computing, artificial intelligence, online education, and digital payments. It prescribes registration, filing, and remittance procedures under the Tax Procedures Act (Cap. 469B), setting taxable profit at 10% of gross turnover, taxed at 30%, as a final levy. The draft also regulates user location determination, tax representation, return amendment, and record keeping. It further introduces penalties and interest provisions under the Tax Procedures Act, transitional measures recognising entities registered under the Income Tax (Digital Service Tax) Regulations, 2020, and revokes the earlier Regulations (L.N. 207/2020). The consultation sought stakeholder submissions to inform the final version of the Regulations.