Taxation of Digital Services in Kenya: Overview and Compliance Requirements
How Kenya taxes digital services: Significant Economic Presence Tax, VAT on digital marketplace supplies, who must register and how to stay compliant with KRA.
Read article
Personal data is one of the most valuable assets in today's economy, and one of the most regulated. The Data Protection Act, 2019 (DPA) gives effect to the right to privacy under Article 31 of the Constitution of Kenya and sets strict rules on how organisations collect, use, store and share personal data. It applies to businesses, schools, hospitals, Saccos, digital lenders, NGOs and government bodies alike. This guide explains the rights the Act gives individuals, the obligations it places on organisations, and the penalties for getting it wrong.
The DPA applies to data controllers (who decide why and how personal data is processed) and data processors (who process data on a controller's behalf). It covers processing by automated and manual means, by organisations established in Kenya, and by organisations outside Kenya that process the personal data of data subjects located in Kenya.
"Personal data" means any information relating to an identified or identifiable natural person, such as a name, ID number, phone number, location data or online identifier. "Sensitive personal data" includes data revealing race, health status, ethnic origin, conscience, belief, genetic and biometric data, property details, marital status, family details, sex and sexual orientation. Sensitive data attracts additional safeguards.
Section 25 of the Act requires personal data to be:
| Right | What it means in practice |
|---|---|
| Right to be informed | Individuals must be told how their data is used, usually through a privacy notice |
| Right of access | Individuals can request a copy of the personal data held about them |
| Right to object | Individuals can object to processing of all or part of their data, including for direct marketing |
| Right to correction | Inaccurate or misleading data must be corrected |
| Right to deletion | False, misleading or unlawfully held data must be deleted |
| Right to data portability | Individuals can receive their data in a structured, machine-readable format and transfer it to another controller |
| Rights on automated decisions | Individuals can, in most cases, refuse to be subject to decisions based solely on automated processing that significantly affect them |
Under the Data Protection (Registration of Data Controllers and Data Processors) Regulations, 2021, registration is mandatory for controllers and processors that meet the prescribed thresholds (broadly, more than 10 employees and annual turnover above KES 5 million) and, regardless of size, for organisations in listed sectors such as healthcare, education, financial services, telecommunications, real estate, transport, direct marketing and businesses that process genetic data. Registration must be renewed periodically.
Processing must rest on a lawful basis, such as consent, the performance of a contract, a legal obligation, vital interests, a public interest task or legitimate interests. Where consent is relied on, it must be express, unequivocal, free, specific and informed, and the organisation bears the burden of proving it. Consent can be withdrawn at any time.
Organisations must build data protection into systems and processes from the start, using measures such as pseudonymisation, encryption, access controls and data minimisation.
A DPIA is required where processing is likely to result in a high risk to the rights and freedoms of individuals, for example large-scale processing of sensitive data, systematic monitoring or the use of new technologies. In 2021, the High Court held that the government's rollout of the Huduma Namba digital ID system without a prior DPIA was unlawful, highlighting the importance of this requirement.
Organisations whose core activities involve large-scale or regular and systematic monitoring of individuals, or large-scale processing of sensitive data, should designate a data protection officer.
Controllers must use processors that provide sufficient guarantees and must put a written contract in place requiring the processor to act only on instructions, keep data secure and assist with compliance.
Where personal data is accessed or acquired by an unauthorised person and there is a real risk of harm, the controller must notify the Data Commissioner within 72 hours of becoming aware of the breach and must notify affected individuals within a reasonably practical period, unless their identity cannot be established. Processors must notify the controller without delay.
Personal data can be transferred outside Kenya only where there are appropriate safeguards, the destination offers adequate protection, the transfer is necessary for specified reasons, or the data subject has consented. Sensitive personal data requires consent and confirmation of appropriate safeguards. The Cabinet Secretary may also require certain data to be processed on servers or data centres in Kenya on grounds of strategic interest.
Personal data may be used for direct marketing only with consent or where the person has been given a simple way to opt out. Unsolicited marketing by SMS, email or calls remains a frequent source of complaints to the ODPC.
The ODPC handles complaints, conducts investigations and can issue enforcement notices and penalty notices. Administrative fines can reach KES 5 million or 1% of the organisation's annual turnover in the preceding financial year, whichever is lower. The ODPC has issued penalties against digital lenders, schools, hospitality businesses and device makers, often for unlawful use of images, debt-shaming of borrowers' contacts and unsolicited marketing. The Commissioner can also order compensation to affected data subjects.
The Act also creates criminal offences, such as unlawfully disclosing personal data. A general penalty of a fine of up to KES 3 million, imprisonment of up to ten years, or both, applies to offences for which no specific penalty is provided. Directors and officers may be personally liable.
Yes. All organisations must comply with the data protection principles, even if they are below the mandatory registration threshold. Small businesses in listed sectors such as healthcare and education must also register.
Accessing a borrower's phone contacts and contacting them to shame the borrower has been found by the ODPC to breach the Act, and digital credit providers have been penalised for it.
The Data Protection (General) Regulations, 2021 require requests to be handled within the prescribed time, generally within seven days for access requests and fourteen days for correction and deletion requests.
We help organisations register with the ODPC, prepare privacy notices and policies, conduct DPIAs, respond to breaches and defend complaints. Talk to our data protection team, and see our article on AI regulation in Kenya.
Clear, practical legal counsel for people and businesses in Kenya. This article is general information, not legal advice. For advice on your situation, speak to one of our advocates.
Talk to an advocate
Technology Law
How Kenya taxes digital services: Significant Economic Presence Tax, VAT on digital marketplace supplies, who must register and how to stay compliant with KRA.
Read article
Risk & Compliance
A practical guide to Kenya's Climate Change Act 2016 and 2023 amendments: institutions, carbon markets, benefit sharing and what businesses must do to comply.
Read article
Technology Law
How Kenyan law applies to AI today: data protection, automated decisions, IP, liability and the National AI Strategy, plus a practical compliance checklist.
Read article