This archive report was first published on 23 August 2019.
On August 23, 2019, Google East Africa Public Policy and Government Relations Lead Michael Murungi testified before the National Assembly's Departmental Committee on Finance and National Planning in Nairobi.
He presented the firm's memorandum on the Finance Bill, 2019, warning that Kenya's proposed digital tax could spark international trade wars.
According to Murungi, the proposed tax defies international tax policies, where companies pay the bulk of their corporate taxes in the countries where the product and services are created, rather than consumed.
He cited France's experience, where the country began taxing big multinational tech companies, leading to a trade dispute with the US Treasury.
“The risk with this is as we see happening in France after its decision to impose a unilateral tax on international firms on digital platforms,” Murungi said.
Executive Director Content Development and Intellectual Property Trust Alex Gakuru also spoke out against the tax, saying it would criminalize the use of the Internet and erode gains made in the country.
“There is no universal consensus on what is a digital marketplace. Now here we are passing an Act creating VAT and also income tax on a digital marketplace,” Gakuru said.
