RUTO’s Gov’t proposes major tax reliefs in digital sector to reduce the cost of living in Finance Bill 2025 - Is he trying to win over Gen Zs?



Wednesday, April 30, 2025 - In a bid to reduce the cost of living and spur growth in the digital economy, the Government has proposed sweeping tax relief measures in the Finance Bill 2025.

Key among the proposed changes is the scrapping of the 1.5% Digital Service Tax (DST), which currently applies to income earned by non-resident companies offering digital services in Kenya.

These include Netflix, Facebook Marketplace, and other online platforms.

The DST is charged on gross transactional value, excluding VAT, and targets businesses without a physical presence in the country.

With more Kenyans relying on digital platforms for shopping, entertainment, and business, the removal of DST could lead to lower costs for everyday online services and purchases.

Additionally, the Government has proposed reducing the tax on crypto transactions from 3% to 1.5%, a move aimed at encouraging innovation and investment in fintech.

According to the Cabinet’s official statement, these digital economy tax reliefs are in line with the Government's plan to prioritise sealing loopholes in existing tax measures instead of introducing new ones to lower the cost of living.

Analysts suggest the tax cuts are also a strategic move to win over Gen Zs, who are the primary consumers of digital services.

This tech-savvy generation has been a persistent force of dissent, especially after the 2024 Finance Bill protests that shook President Ruto’s administration to its core.

The Kenyan DAILY POST

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