This archive report was first published on 6 May 2020.
On May 6, 2020, former ICT Minister Bitange Ndemo expressed concerns over the Kenyan government's plan to tax digital platforms as part of its efforts to fund the Sh3 trillion 2020/2021 budget.
Speaking during a pre-budget webinar organized by Ernst and Young (EY), Ndemo warned that taxing digital companies, such as WhatsApp and Facebook, would be counter-productive to plans to expand the country's tax-paying base.
He noted that such a move would affect SMEs that rely on digital platforms to market their services, and could drive Kenyan manufacturers away from local industry, leading to more job losses.
“Taxing digital companies that are not domiciled in Kenya is impossible,” Ndemo said, adding, “They have brought more benefits to the Kenyan economy than we thought.”
A tax partner at EY, Francis Kamau, also expressed concerns over the proposed tax, warning that it would amount to double-taxation and hit industry hard.
He pointed out that the government should have delayed the proposed tax to allow for more consultations, and that plans to tax contributions to the National Social Security Fund (NSSF) were another step in the wrong direction.
