This archive report was first published on 21 August 2019.
On August 21, 2019, Google warned Kenya of the risks of trade wars if it imposes tax on digital transactions.
The warning came as the Kenyan government proposed amendments to the Finance Bill 2019, which would see online businesses slapped with an income tax.
According to Google, the proposed amendments are contrary to the international tax system, which requires companies to pay the bulk of their corporate tax in the countries where their products and services are created, not where they are consumed.
Google's public policy and government relations leader in the region, Michael Murungi, told Members of Parliament that if the law is passed in its current state, it could set Kenya on a collision path with other jurisdictions.
He cited the example of France, which stuck to its plan to tax big multinational tech companies, defying US President Donald Trump's suggestion that he might impose tariffs on French wine.
France is now in the midst of a trade dispute with the US Treasury because of that tax, which was seen as targeting Google and other multinational firms based in the US, Murungi said.
