Why KRA Is Targeting Netflix, ChatGPT and Airbnb: What You Need to Know

Nairobi, Kenya — September 25, 2025

The Kenya Revenue Authority (KRA) is expanding its taxation reach to digital platforms and short-term rentals, moving beyond traditional tax bases to capture revenue from streaming services, AI firms, and holiday rentals. Under new regulations, global players like Netflix, ChatGPT operators (e.g. OpenAI) and Airbnb hosts will now be liable for taxes tied to Kenyan users and properties. 

The Shift: From DST to SEP / Significant Economic Presence

• Kenya introduced the Digital Service Tax (DST) effective 1 January 2021, at 1.5 % of the gross transaction value, targeting digital services provided to Kenyan users. 

• Under the Tax Laws (Amendment) Act 2024, Kenya officially replaced DST with a Significant Economic Presence (SEP) regime, effective December 27, 2024. 

• Under SEP, digital businesses with a real or measurable presence in Kenya (even without a physical location) can be taxed at 3 % of gross turnover from Kenyan clients. 

• The SEP regime also introduces a Ksh 5 million turnover threshold, below which nonresident digital entities may be exempt. 

This transition is intended to widen the tax net and better align Kenya with global norms around taxing the digital economy.

Why Netflix, ChatGPT, Airbnb Are Now in the Crosshairs

These platforms fall under categories now explicitly taxable because:

• Digital content & streaming (Netflix, etc.) is considered a “digital service” under the DST / SEP framework. 

• Artificial intelligence / automated services (ChatGPT, OpenAI) qualify as digital platforms that monetize user data or provide services via the internet, placing them under the SEP net. 

• Short-term rentals / Airbnb hosts generate rental income and may also be subject to VAT (16 %) for stays of less than one month in serviced apartments and villas. 

• KRA has also launched a digital system for tracking rental income compliance, called eRITS (Electronic Rental Income Tax System), to streamline and enforce taxation of real estate rentals. 

• The Finance Act 2025 also amended the Tax Procedures Act, empowering KRA to pursue digital, rental and employment taxes from non-residents who earn income from Kenya. 

In short: If you provide digital services to Kenyan users, or host short-term accommodations in Kenya, you are now more likely to be captured in formal tax structures.

How It Will Work & Who Must Comply

Taxes are generally due by the 20th day of the month following the service or rental income event, under the DST/SEP frameworks. 

What KRA Stands to Gain

• Since launching DST, KRA has reportedly collected over Ksh 1.1 billion from digital services. 

• Expanding to SEP and rental systems helps close tax leakage where large global platforms previously avoided local income tax. 

• The eRITS system aims to make compliance easier for landlords, thereby increasing correct declarations and revenue from real estate. 

• Broader tax base supports Kenya’s medium-term revenue goals and reduces dependence on conventional taxes.

Risks, Challenges & Criticism

• Double taxation & treaty conflicts: Some countries may see SEP / DST as conflicting with their domestic tax treaties.

• Enforcement issues: Identifying digital transactions, IP addresses, and user location requires technical capacity and cooperation from foreign platforms.

• Pushback / resistance: Platforms or content providers may challenge tax regimes, citing overreach or unfairness.

• Cost of compliance: Smaller hosts or content creators may struggle with registration, filing, or costs associated with tax compliance.

• Data privacy & legal boundaries: Collected metadata, usage or billing data may raise tensions with data protection laws.