This archive report was first published on 29 August 2019.
On August 29, 2019, the question of whether or not to tax online services was a topic of discussion.
Traditional providers of internet services, such as telcos and ISPs, are already taxed, but the target group for the new tax bracket would be global digital players like Netflix, YouTube, Facebook, and Google.
These companies make significant amounts of money from advertising services, but they only pay tax in the countries where they are headquartered.
Kenya and other emerging markets do not benefit from this tax income, despite having millions of subscribers.
However, taxing these services could be a challenge, as the digital giants may opt to move out of the African market if it's not worth their time and money.
Already, some video clips do not play back to African viewers due to low advertisement revenue.
A poorly thought-out tax regime may be counterproductive, leading to a loss of benefits for consumers.
Instead of simply taxing online services, Kenya could consider attracting digital companies to create local content and establish a local presence, providing a broader tax regime and better returns.
