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Netflix Increases Prices in Kenya Following Digital Service Tax

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Image courtesy Forbes

The Digital Service Tax that was signed into law earlier this year has begun to have an effect with Netflix now increasing its pricing for its Premium Plan.

This does not come as a surprise since it was expected that digital services would go up in the country as a result of the new tax. But there is no doubt that this will hit a number of Netflix users that hadn’t planned to pay extra coins.

The movie and series streaming service announced on Monday that Premium users will begin paying KES 250 more from May 24th.

Currently, these are the charges for all plans on the platform:

PACKAGESOLD PRICE NEW PRICE
Basic Kes.806Kes.700
Standard Kes.1000Kes.950
Premium Kes.1209Kes.1200

This means that the prices for Standard and Premium package will rise to KES 1100 and KES 1450 respectively.

There is no doubt that this rise in costs will set the service at a disadvantage against its rivals including Showmax and Amazon Prime Video. This is considering the fact that Showmax just reduced its mobile-only pricing to KES 300 while Prime Video only charges $5.99. Even though the two aren’t as popular as Netflix, it’s almost certain that these changes will help them attract attention.

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If not, there is a huge possibility that many Premium users will pick up the Basic or Standard plans in order to avoid the huge fluctuation.

This development briefly follows the changes implemented in the AirBNB market that was also a result of the new tax. According to the new regulations, furnished apartments and private villas are now among the licensable accommodation facilities that offer hospitality services. In that light, as per the Tourism Regulatory Authority (TRA), all AirBNB’s must be registered, inspected and licensed by the TRA.

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