UNCTAD Cautions Kenya Govt Against Introducing Taxes on Digital Economy
A report by the United Nations Conference on Trade and Development (UNCTAD) shows that Kenya, Egypt, Nigeria, and South Africa are the continent’s leading digital economies. According to the report, the four countries control a combined 60% of Africa’s digital and are ahead in utilizing data and various platforms to drive digital entrepreneurship.
Ghana, Morocco, Senegal, Tunisia, Uganda, and Tanzania gobble up another 20 per cent with the remaining 20 per cent shared amongst 44 African countries.
According to the Communications Authority of Kenya (CA), the country’s digital entrepreneurship industry is estimated to be worth more than Sh4.3 billion.
However, the UN body notes that the introduction of digital taxes in Kenya would derail the gains made thus so far. Kenyan government intends to tax mobile application and internet usage thus will be counterproductive as may reduce active internet users.
In addition, taxation may suppress growing start-ups and online businesses leading to a decline in digital economic activity.
Countries in discussion to introduce interim and permanent measures to tax the digital economy include Kenya, Uganda, Tanzania, and Zambia.
However, the report cited unequal wealth distribution as digital economies concentrate wealth on a small number of individuals, companies, and countries.