Revision significantly expands the tax base
The Tax Laws (Amendment) Act, 2024, has revised Section 5 of the Excise Duty Act, 2015, to include excisable services provided by nonresidents through digital platforms. This amendment subjects these services to excise duty, with the responsibility for payment falling on the nonresident service providers. The amendment aligns the treatment of nonresident digital service providers with local providers.
Compliance
Providers of excisable services must apply for an operating license, with penalties for non-compliance. Excise duty on betting and gaming is due within 24 hours of transaction closure, while other excisable services must be paid by the 20th of the following month.
KPMG observation
The revision significantly expands the tax base, now including nonresident entities providing digital services via online platforms. This aims to ensure tax equality by requiring nonresident service providers to contribute to the same excise duty obligations as their resident counterparts.
Read a January 2025 report prepared by the KPMG member firm in Kenya