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Netflix Increases Rates for Users in Kenya Due to Digital Tax

Subscription video-streaming service, Netflix has reviewed its prices upwards for clients in the Kenyan market. The move was expected following the implementation of the 1.5 percent digital tax for online services.

Consequently, the rates have been revised as follows: The standard package supporting two users will now cost Sh1,100, up from Sh950. The premium package will now cost Sh1,450 up from Sh1,400. The rates will remain the same for the basic package that costs Sh700.

The company issued a notice alerting users of the intended price reviews.

“Starting May 30, a value-added tax (VAT) will be included in your Netflix price,” read the company’s message to a subscriber.

Read: Netflix Mulls Putting a Stop to Unauthorized Password Sharing

The Kenya Revenue Authority introduced digital tax for goods and services sold online. International companies that accrue some revenue for Kenya’s online market are also required to pay the 1.5 percent flat rate.

Some of the products that fall in the bracket include e-books and movies, music, and games, tickets for live events and theatres, subscription-based media including news, magazines and digital content.

KRA disclosed that it was targeting Sh5 billion within the first six months of implementing the tax. So far, a number of online businesses have announced the addition of the tax to their prices. Facebook ads and Google Play store ads said their prices had been revised effective April this year.

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Written by Vanessa Murrey

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