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Netflix hikes subscription rates in Kenya

Netflix has increased its monthly subscription charges in Kenya effective this month after the company included a value-added tax charge in its billing.

The digital tax, which came into effect on January 1, affected subscription-based media including online news and magazines subscriptions as well as online ticketing services.

Subscribers of the streaming network are being notified of the changes a week before they renew their subscriptions.

Netflix reviewed its rates to Sh1,100 from Sh950 for the standard package and Sh1,450 from Sh1,200 for the premium package.

The price hikes, which took effect from the end of May, do not affect subscribers under the basic plan currently paying Sh700.

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

Online video platforms have become a popular alternative for the consumption of programming with their adoption fuelled by improved internet access and Covid-19 disruptions that have driven growth in e-commerce.

Streaming services, Mobile apps, e-books and films are some of the services that started attracting the tax among other available digital content.

Read: https://nairobinews.nation.co.ke/editors-picks/what-will-attract-digital-service-tax

Others include the provision of search engine services, chatbots, remote support, instant feedback services and customised search engine services.

KRA in January said licensing, sales and other forms of monetising data collected from Kenyan users, online training delivered through pre-recorded media or e-learning platforms and courses or any services provided through the digital marketplace, will attract a 1.5 percent tax.

The taxman is banking on Covid-19 disruptions that have accelerated use of online platforms to sell goods and services and raise Sh5 billion from the sector in the six months to June.

The latest data from the Communications Authority (CA) shows that mobile data subscriptions in Kenya stood at 44.4 million in the second quarter of 2020.

Factors driving this growth include increasing population coverage of 3G and 4G networks, availability of affordable smartphones and data plans.

It is also attributed to increased consumption of e-commerce, e-government, social media and other online content.