In a bid to boost revenue, Kenya’s National Treasury has proposed amendments to extend the digital service tax to local online platforms, including ride-hailing services like Uber and Bolt, and food delivery services. The Finance Bill 2024, presented by Treasury Cabinet Secretary Njuguna Ndung’u, aims to impose a 1.5% digital service tax on these platforms. This tax, which came into effect on January 1, 2021, already applies to the sale of digital content like e-books, music, and movies. The new proposal seeks to broaden its scope, affecting local platforms with a significant presence in Kenya. If approved by Parliament, this amendment will bring additional revenue from the rapidly growing digital economy.

The Kenya Revenue Authority (KRA) announced plans to launch a new transfer pricing database in April 2024, allowing its agents to review multinational company transactions for tax evasion and compliance.

Amid this development, which places more financial burden on Kenyans, the African Development Bank raised an alarm in its macroeconomic performance and outlook for 2024 that an increase in the cost of living in some African countries could lead to social unrest.

Recently, African countries have introduced taxes in the digital sector. Ghana disclosed plans in April 2024 to tax resident Ghanaians’ foreign incomes to close a significant revenue gap left by the cancellation of the value-added tax (VAT) on electricity earlier this year.  Last week, Nigeria revealed plans to reintroduce telecom taxes and other fiscal policies in exchange for a $750 million loan from the World Bank.