The government has explained the recent move by the National Treasury to introduce new taxation measures including digital tax.
In a press release by Government Spokesperson Isaac Mwaura on Monday, November 11, the tax proposals targeting the digital space were part of the measures aimed at expanding the tax base.
As detailed in the document, many Kenyans and foreigners in the digital space were currently not paying taxes despite earning an income.
Therefore, their inclusion in taxation, will not only expand the tax base but also help the government raise more revenue.
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"The proposed laws seek to expand the digital tax base, including services like ride-hailing, food delivery, freelance, and professional services under the definition of a digital marketplace," read the statement in part.
"This move is essential in ensuring that digital service providers fairly contribute to the economy.
On the other hand, the government explained that digital taxation was a global practice, hence the need to make new laws targeting foreigners in the space.
"A tax will be levied on income derived from services provided by non-resident entities operating in Kenya's digital marketplace. This ensures that foreign digital businesses contribute at fair rates and aligns Kenya's tax system with global best practices," Mwaura added.
The proposed amendments are set for debate in the National Assembly in the coming days.
