Kenya appears to be getting set for the 2021 timeline for the commencement of the 1.5% digital tax regime in the country. To that effect, it is not leaving any stone unturned towards shoring up any loopholes that may be exploited by internet businesses should it decide to go ahead with with the plans. Thus, to forestall a situation where digital tax evaders from Kenya will run to neighboring countries, the tax authorities of Kenya, Uganda, Tanzania, Rwanda, South Sudan and Burundi, member countries of the East African Community (EAC), have agreed on November 11, 2020 to develop a common strategy for the taxation of the digital economy in the sub-region.
East Africa digital tax East Africa digital tax
In the final communiqué issued at the end of the 48th General Meeting of Commissioners of Tax Authorities of East Africa, which was held virtually, these tax authorities said they had agreed to develop a common strategy “to deal with the taxation of the digital economy by addressing the problems linked to the legal framework, in terms of definitions, identification of actors and legal mechanisms ”.
Through this united front that the members of the ECA want to present, the objective is to put pressure on the global tech giants who are making profits in their various markets. Forced to come to terms with everyone, they will not have the opportunity to take advantage of weaknesses and other gray areas of different tax systems.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer