Taxing the Digital Economy in Kenya.

The emergence of the digital economy with very intangible business models has become one of the biggest problems stressing the taxman that wants to increase its tax base revenue from anything and everything taking place within its boundaries. Governments across the world are always coming up with new laws and regulations aimed at ensuring all businesses pay their fair share of taxes. There are so many jurisdictional loopholes that the Kenyan government has not been able to seal in order to impose taxes on the digital market place largely because of its complexities especially global firms like Netflix. With the National Treasury seeking to hit 6.1 trillion Kenya shillings tax base by 2021, the fast-rising digital economy will obviously be one of the channels to prey in order to achieve this.

The Finance Act, 2019 effected on November 7 2019 tasked the Cabinet Secretary of the National Treasury with the role of setting these taxing modalities. Well, the CS Mr. Ukur Yattani has now published a draft to introduce changes to the Income Tax and VAT to subject goods and services supplied in the digital marketplace to taxes. Income accruing through a digital marketplace is now taxable while the Value Added Tax is to be charged on income made through sales of products and services on the digital marketplace.

Full story on Chetenet.com: https://chetenet.com/2020/06/03/the-government-is-very-ready-to-tax-the-digital-economy/