The ICT ministry is in the final stages of developing a framework that will be used to tax foreign online streaming media services such as YouTube and Netflix.
The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers.
OTT services include all applications that offer voice and messaging services over the internet.
Communications Authority director-general Francis Wangusi said online content providers exploit the Kenyan industry yet neither the government nor artistes benefit from them.
"Many countries especially developed ones have policies that guide these services, and that is where we are heading to as a country," Mr Wangusi told the Business Daily, adding that traditional distribution channels have been weakened.
He said technologies that will facilitate taxation of OTT services are available.
"I believe the OTTs will declare the correct revenues, considering that the international community is also watching them," Mr Wangusi said, adding that once a policy is developed the government will have grounds to shut down those that will not adhere to the rules.
The proposed policy framework will also ensure that foreign advertisements that air in the Kenyan market are subjected to taxation.
Already, the Kenya Revenue Authority (KRA) has announced plans to collaborate with CA to introduce VAT obligations for app developers trading in Kenya. The taxman will target apps with in-app purchases, those that sell goods and services and those that require users to pay before downloading.
Mr Wangusi (above) asked parents and teachers to encourage young people to seek help from the right authorities when faced with online risks and vulnerabilities including cybercrimes as well as sexual exploitation and abuse.
"Several authorities including the Directorate of Criminal Investigations, CA's cybercrime investigations arm and the department of children services are some of the places parents and the community need to encourage the youth to run to," Mr Wangusi said while speaking on the sidelines of the National Music Festivals.
He cited online grooming, solicitation, cyber bullying, stalking, sexting, identity theft, catfishing and exposure to child abuse content as some of the risks children are exposed to.