New Definitions for Digital Lenders and Marketplaces

The bill introduces clearer definitions for two key players in Kenya’s digital economy:

• Digital Lender: A person extending credit electronically, excluding licensed banks, microfinance institutions, or SACCOs.
• Digital Marketplace: Any online platform enabling users to sell or provide goods, property, or services to others.

This change brings consistency with the CBK Act and aligns with broader compliance shifts in Kenya’s evolving fintech ecosystem.

Goods Classification Now Aligned with EAC

The Excise Duty Act will now adopt the EAC Customs Union Protocol for goods classification. This move standardizes classification rules and reduces customs disputes.

• Improves regional trade consistency
• Reduces tax misinterpretation at border points
• Supports import/export accuracy

Excise License Approval Now Limited to 14 Days

Until now, there was no timeframe for reviewing license applications. The bill changes that. Once all documents are submitted, the Commissioner must act within 14 days.

• Inital: Submit application
• Day 7: Initial review begins
• Day 14: Approval issued or feedback provided

This promotes efficiency and better aligns tax processing timelines with business realities.

Excise Duty for Non-Resident Digital Providers

The bill proposes extending excise duty to cover non-resident digital service providers, including platforms operating from abroad but serving Kenyan users.

This aligns with VAT policies and helps the KRA’s ability to collect tax revenue from foreign digital services—ensuring fair competition for local providers.

Additional Reference: Turnover Tax

If your business also handles turnover tax or minimal tax compliance, refer to our Turnover Tax Guide for insights on parallel changes.

Summary of Key Proposals

FAQs

1. Will digital platforms automatically be taxed?
   Not immediately. Definitions are clarified first to support later enforcement.
2. Do I need to reapply for my excise license?
   No, but all new applications fall under the 14-day approval window.
3. How does this affect non-resident businesses?
   They must register and comply with excise obligations for services offered in Kenya.