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. That tax no longer exists. The Tax Laws (Amendment) Act, 2024, assented to on 11 December 2024 and effective from 27 December 2024, repealed DST entirely and replaced it with the Significant Economic Presence (SEP) Tax. This is a settled legal change, confirmed by multiple independent tax-advisory analyses and by KRA's own regulatory activity (KRA has been developing implementing regulations for SEP Tax, which would make no sense if DST were still the operative regime) — not an unresolved ambiguity, even though it is recent enough that many online resources still describe the old 1.5% DST as current.

SEP Tax works differently from DST, both in rate and in structure. Rather than a flat percentage of the transaction value, SEP Tax deems 10% of a non-resident's gross turnover from Kenyan users to be taxable profit, then applies Kenya's standard 30% corporate income tax rate to that deemed profit — 10% times 30% works out to an effective rate of 3% of gross turnover, exactly double the old DST rate. For a business operating a digital marketplace rather than selling directly, the taxable base is the commission or fee the platform itself earns, not the full value of transactions passed through to third-party sellers.

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. A non-resident with an actual permanent establishment in Kenya, or one providing certain licensed communications services, is generally exempted from SEP Tax and taxed under ordinary rules instead. Kenya-resident digital businesses were never subject to DST or SEP Tax in the first place — they are taxed under Kenya's standard corporate or turnover tax rules, a distinct calculation this tool does not cover. The Finance Act, 2025 expanded SEP Tax further, removing an earlier annual turnover exemption threshold that had excluded smaller non-resident providers, so as of the most recent legislative update, SEP Tax applies regardless of the size of a qualifying non-resident's Kenyan turnover.

One point is worth being transparent about rather than glossing over: while the SEP Tax rate and its statutory basis are settled under the Tax Laws (Amendment) Act, 2024 and the Finance Act, 2025, KRA's detailed procedural implementing regulations were still in draft form as of this calculator's last verification — meaning the tax and the 3% rate are legally in force now, but some administrative and filing-procedure details may still be finalised. This calculator computes the tax rate, which does not depend on those procedural regulations; it also includes a historical DST mode (1.5%) for anyone reconciling a period before 27 December 2024, clearly separated so the two regimes are never confused.

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

Kenya's Significant Economic Presence (SEP) Tax is a tax on income non-resident businesses earn from Kenyan users through digital or internet-based services, without needing a physical presence (permanent establishment) in Kenya. It replaced the earlier Digital Service Tax (DST) effective 27 December 2024, under the Tax Laws (Amendment) Act, 2024. Where DST was a flat 1.5% of gross transaction value, SEP Tax is computed by deeming 10% of gross turnover from Kenyan users to be taxable profit and applying Kenya's standard 30% corporate tax rate to that deemed profit — an effective rate of 3% of gross turnover, or of the commission/fee received for a digital marketplace facilitator.

SEP Tax applies specifically to non-resident providers — streaming services, software subscriptions, app marketplaces, and similar online platforms operating from outside Kenya without a taxable physical presence there. Kenya-resident businesses providing digital services are taxed under ordinary Kenyan corporate or turnover tax rules instead, not SEP Tax. The Finance Act, 2025 broadened SEP Tax's scope further, removing an annual turnover exemption threshold that had previously excluded smaller non-resident providers.

This calculator is valid for computing the tax rate itself, which is settled under primary legislation. It does not model exemptions for non-residents with a Kenyan permanent establishment or licensed communications providers, filing mechanics, or the detailed procedural regulations KRA was still finalising as of this calculator's last verification — for those, consult KRA directly or a tax adviser familiar with the current implementing regulations.

How to use this calculator.

1. 01Enter your monthly gross turnover from Kenyan users in KES — or, if you operate a digital marketplace, the commission or fee your platform earns rather than the full transaction value.
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]BDO East Africa — Understanding Significant Economic Presence Tax: A Shift from Digital Service Tax in Kenya (confirms the 3% rate, 10%/30% derivation, and 27 December 2024 effective date of the Tax Laws (Amendment) Act, 2024)