This archive report was first published on 2 November 2019.
Kenya is facing a financial crisis, with a public domestic debt of over KES 1.2 trillion. In an effort to meet tax targets, the government is expanding the tax bracket and increasing the burden on existing taxpayers.
The World Bank has criticized Kenya's plan to tax small businesses operating in the digital space, citing difficulties in evaluating the value of online economic activities and potential discouragement of the nascent digital economy.
According to the World Bank's Kenya Economic Update, published on November 2, 2019, the government's plan to introduce a new provision in the Income Tax Act to list income accruing through a digital marketplace as taxable income may not be feasible.
Casey Turgusson, a Senior Digital Development Specialist at the World Bank Group, argued that the move could discourage the growth of the digital economy in Kenya.
The government's austerity measures, including huge budget cuts for various government departments, have been introduced in an effort to address the financial crisis. However, critics argue that the tax burden should not be imposed on taxpayers while government officials live lavish lifestyles.
