Netflix, YouTube, Radio and TV Set for Equal Taxes in Kenya's Finance Bill 2025

• Kenya’s Finance Bill 2025 proposes to subject traditional radio and TV as well as digital platforms to the same VAT regime starting July 1, 2025
• The bill amends Section 8 of the VAT Act by removing specific references to traditional broadcasters and consolidating all media under the term “electronic services”
• This change will require all broadcasting service providers, regardless of platform or country of origin, to register for VAT and comply with local tax obligations

Elijah Ntongai, a journalist at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan and global trends.

The Finance Bill 2025 has proposed to level the Value Added Tax (VAT) regime for all broadcasting services in Kenya.

Effective July 1, 2025, all broadcasting services consumed in Kenya, whether through traditional platforms like radio and television or digital giants such as Netflix, YouTube, and Spotify, will be subject to the same Value Added Tax (VAT) regime.

The bill has proposed amendments to Section 8 of the VAT Act by eliminating specific provisions for traditional broadcasters and instead consolidating all media content, both traditional and digital, under the umbrella of “electronic services.”

The Finance Bill 2025 reads "...that, section 8 of the Value Added Tax Act is amended… in subsection (3), by deleting the words "broadcast television" appearing in paragraph (g) and substituting therefor the words "internet, radio or television broadcasting services."

This reclassification will compel all broadcasting service providers to register for VAT and ensure compliance, regardless of how the content is delivered or where the provider is based.

According to a review of the bill by the Oraro & Company Advocates, the amendment removes the distinction between terrestrial radio/TV and streaming platforms, aligning Kenya’s tax regime with international standards that treat all forms of media consumption equally for tax purposes.

The move is expected to close long-standing loopholes that allowed foreign-based digital content providers to operate without charging or remitting VAT, giving them an edge over local broadcasters.

However, it also raises questions about enforcement, especially in taxing global platforms that lack a physical presence in Kenya.

Finance Bill 2025 on digital marketplaces

Alongside the VAT changes, the Finance Bill 2025 also broadens the scope of excise duty to cover services provided by non-resident entities operating through digital marketplaces.

By redefining a digital marketplace as any online platform enabling users to sell goods or services to each other, the bill ensures that platforms facilitating services over the internet or electronic networks fall under the tax net.

To support this, the bill proposes a formal definition of a non-resident person as someone outside Kenya, thereby clarifying who is liable for the excise duty.

Moreover, it introduces a provision deeming services consumed by Kenyans via the internet, regardless of where the provider is located, as having been supplied within Kenya. This ensures digital services are taxed similarly under both the Excise Duty Act (EDA) and the VAT Act.

These changes reflect the government’s ongoing push to adapt its tax regime to the realities of a digitised global economy, bolster domestic revenue collection, and create a level competitive environment for both local and international service providers.

Other VAT changes in Finance Bill 2025

TUKO.co.ke also reported that the Finance Bill 2025 proposes sweeping changes to Kenya’s VAT framework, including shifting previously exempt goods and services to the standard 16% VAT rate.

Affected sectors include healthcare, aviation, energy, tourism, housing, manufacturing, mining, and information storage, with products like medical supplies, solar equipment, and affordable housing materials set to become more expensive.

The bill also introduces Section 66A to penalise the misuse of exempt or zero-rated goods and mandates tax invoicing for all VAT-registered persons, even on exempt supplies.

Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.

Source: TUKO.co.ke