Kenya Digital Service Tax / SEP Tax Calculator

Background.

Kenya's tax on non-resident digital service providers changed substantially and recently, and this calculator computes the current regime rather than the one many older articles still describe. From 2021, Kenya applied a Digital Service Tax (DST) — a flat 1.5% of gross transaction value — to income non-resident businesses earned from Kenyan users through a digital marketplace. The Tax Laws (Amendment) Act, 2024, assented to on 11 December 2024 and effective from 27 December 2024, replaced that DST provision with the Significant Economic Presence (SEP) Tax. The current consolidated Income Tax Act confirms that SEP Tax, not DST, is the operative section 12E regime.

SEP Tax works differently from DST, both in rate and in structure. It deems 10% of a non-resident's gross turnover from Kenyan users to be taxable profit and charges 30% of that deemed profit — an effective rate of 3% of gross turnover, exactly double the old DST rate. KRA's September 2025 draft regulations say a digital marketplace's gross turnover is the commission or fee paid to the marketplace provider rather than the full transaction value. Because those detailed regulations were still draft at this calculator's last verification, marketplace operators must confirm the final taxable-base rule before filing.

The scope of SEP Tax is also specific: it applies to non-resident persons providing services to Kenyan users through the internet or an electronic network — streaming platforms, software-as-a-service providers, app marketplaces, ride-hailing and delivery platforms operating without a Kenyan permanent establishment, and similar businesses based abroad. Section 12E excludes a non-resident offering the services through a Kenyan permanent establishment, income already chargeable under section 9(2) or section 10, and specified airline services. Kenya-resident digital businesses are taxed under Kenya's ordinary rules, not SEP Tax. The Finance Act, 2025 removed the earlier KES 5 million annual-turnover exclusion and broadened the wording to internet or electronic-network services, so the current statutory section has no de-minimis threshold.

The statutory 10% deemed-profit fraction and 30% tax rate are in force. KRA's detailed procedural implementing regulations were still draft as of this calculator's last verification, so administrative mechanics and the marketplace-base detail may still change. This calculator estimates the statutory rate on the turnover figure you enter; it does not determine eligibility or replace current KRA filing guidance. It also includes a clearly dated historical DST mode for periods before 27 December 2024. Always match the selected mode to the month in which the taxable service was supplied, and retain supporting turnover records for that period.

What is kenya digital service tax (sep tax) calculator?

Kenya's Significant Economic Presence (SEP) Tax applies to qualifying income of non-resident businesses from Kenyan users through internet or electronic-network services without a Kenyan permanent establishment. It replaced the earlier Digital Service Tax effective 27 December 2024. The current Income Tax Act deems 10% of gross turnover to be taxable profit and charges 30% of that amount, producing an effective 3% rate.

The Finance Act, 2025 removed the former KES 5 million annual-turnover exclusion and broadened section 12E beyond the earlier digital-marketplace wording. Kenya-resident businesses remain outside SEP Tax and are taxed under ordinary Kenyan rules.

This calculator applies the statutory rate to the turnover you enter. It does not determine whether an exclusion applies, and it does not settle marketplace-base or filing details in KRA regulations that were still draft at the last verification. KRA's draft treats a marketplace's commission or fee as its gross turnover, but a marketplace operator should confirm the final rule before a real filing.

How to use this calculator.

1. 01Enter monthly gross turnover from Kenyan users in KES. If you operate a digital marketplace, KRA's September 2025 draft uses the platform's commission or fee, but confirm the final taxable-base rule before filing.
2. 02Select the current SEP Tax regime (the default, for any period from 27 December 2024 onward) unless you are specifically reconciling a period before that date, in which case select the historical DST option.
3. 03Read the primary result: the tax due for that period.
4. 04Review the deemed taxable profit figure (10% of turnover) to see how the 3% SEP Tax rate is derived, and the annualised tax figure for rough yearly budgeting.
5. 05If you're unsure whether SEP Tax applies to your business at all — for example, if you have a Kenyan permanent establishment, or provide a licensed communications service — confirm your specific exemption status with KRA or a tax adviser before relying on this calculator's output.

The formula.

Under the current SEP Tax regime, the calculator deems 10% of gross turnover to be taxable profit — a simplified profit assumption that avoids the need for a non-resident with no Kenyan books of account to compute actual profit margins. That deemed profit is then taxed at Kenya's standard 30% corporate income tax rate. Multiplying 10% by 30% gives an effective rate of exactly 3% of gross turnover, so the calculator computes the tax due directly as turnover times 3% — the deemed-profit step is shown separately so the derivation is transparent and auditable rather than presenting 3% as an unexplained flat rate.

Under the historical DST mode, used only for reconciling a period before 27 December 2024, the calculator applies the old flat 1.5% rate directly to gross turnover, with no deemed-profit step, matching how DST actually worked before it was repealed.

The calculator also reports net turnover after tax (turnover minus tax due) and an annualised tax figure (monthly tax due multiplied by 12), useful for a business trying to budget a full year's SEP Tax exposure assuming reasonably steady turnover. None of these calculations determine whether SEP Tax applies to a given business in the first place — that depends on residency, permanent-establishment status, and the nature of the service, which are eligibility questions outside this calculator's scope.

A worked example.

Frequently asked questions.

References& sources.

1. [1]Kenya Revenue Authority — public notice on the draft Income Tax (Significant Economic Presence Tax) Regulations, 2025
2. [2]Kenya Revenue Authority — draft Income Tax (Significant Economic Presence Tax) Regulations, 2025 (PDF)
3. [3]Kenya Law — current consolidated Income Tax Act, section 12E and Third Schedule (10% deemed profit and 30% SEP Tax rate)
4. [4]Kenya Law — Tax Laws (Amendment) Act, 2024 (SEP Tax replacement and 27 December 2024 commencement)