The Kenya Revenue Authority (KRA) has succeeded in collecting KSh 1.1 billion in digital tax revenue over a 21‑month period, highlighting the growing importance of digital taxation amid the rapid expansion of online economic activity.
Between September 2023 and June 2025, the tax authority levied charges on digital asset transactions and income derived from digital platforms, marking a key milestone in the government’s efforts to broaden the tax base and tap into new revenue sources.
The revenue, accumulated as part of a broader drive to formalize taxation within the digital economy, reflects a strategic expansion of Kenya’s fiscal framework. Under the Finance Act provisions of June 2024, KRA introduced a 1.5 percent levy on local digital services like online job platforms, ride‑hailing and food delivery, alongside a 6 percent “Significant Economic Presence” (SEP) tax targeting income from foreign digital companies earning revenue in Kenya.
The authority’s enforcement efforts and compliance mechanisms appear to have effectively captured the value generated by both local start‑ups and international tech players operating on Kenyan digital soil.
This surge in digital tax receipts signals a maturing digital economy and reflects KRA’s commitment to leveraging the growth in e‑commerce, fintech, online gig work and digital asset trade. The Sh1.1 billion figure, equivalent to approximately USD 8 million, underscores the potential returns from regulating previously under‑taxed economic channels.
Beyond this initial revenue injection, KRA expects digital taxation to become an increasingly significant component of annual collections, helping offset deficits from traditional sectors and boosting resources for public expenditure.
The achievement arrives amid wider overall tax performance growth. In the financial year ending June 2025, Kenya raised KSh 2.57 trillion (about USD 19.9 billion), up 6.8 percent from the previous year.This uplift was driven by stronger collections in agriculture, transport, insurance and real estate, but digital taxation played a critical supporting role.
Commissioner General Humphrey Wattanga attributed the total growth to technology deployment, enhanced compliance, and the taxation of multinational digital players.
The government’s move to impose taxes on digital transactions stirred public debate in mid‑2024, with protests led by gig workers, platforms like Bolt and Uber, and their users through campaigns such as #RejectFinanceBill2024.Critics warned that the levies could raise consumer costs or push platforms out. However, KRA’s revenue figures suggest that these tax measures did not severely impact transaction volumes, or at least that enforcement measures recouped gains from compliance.
For now, the Sh1.1 billion haul reinforces Kenya’s position as a pioneer in digital economy taxation in the region and validates policy makers’ belief that the sector offers fertile ground for revenue mobilization.
As digital adoption accelerates with more platforms, digital assets, and online consumer services entering the mainstream KRA is expected to ramp up monitoring, refine definitions of taxable digital presence, and potentially adjust rates to balance revenue needs with ecosystem growth. What remains clear is that digital taxation is no longer fringe; it has become central to the strategic agenda of Kenya’s revenue authority.
Written By Ian Maleve
