This archive report was first published on 8 May 2020.
On May 7, 2020, the Kenyan government tabled the Finance Bill 2020 in Parliament, which includes a proposal to impose a 1.5% tax on products sold through online platforms.
The tax will be remitted by e-commerce firms trading online, and the revenue generated will be used to boost tax revenues.
According to the Finance Bill 2020, the tax will be payable by a person whose income from the provision of services is derived from or accrues in Kenya through a digital marketplace.
However, a resident person or a non-resident person with a permanent establishment in Kenya will be able to offset the digital service tax paid against the tax payable for the year of income.
The proposal has sparked a divided opinion, with some arguing that Kenya needs to ease up on taxing the nascent online industry and give it room to grow, while others argue that firms operating on these platforms tend to repatriate profits to their home countries.
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