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‘Kenya may be shooting itself in the foot’ with digital services tax, Fedha CEO says

By David Whitehouse
Posted on Tuesday, 23 February 2021 15:50

Kenya's Finance Minister Ukur Yatani holds up a briefcase containing the Government Budget for the 2020/21 fiscal year in Nairobi
Kenya's Finance Minister Ukur Yatani holds up a briefcase containing the Government Budget for the 2020/21 fiscal year in Nairobi, Kenya, June 11, 2020. REUTERS/Baz Ratner

Kenya’s tax on digital services risks stifling the development of the country's high-tech sector, Dhruv Pandit, CEO of Kenyan real-estate company Fedha, tells The Africa Report.

The digital services tax, which came into effect at the start of January, is 1.5% of gross transaction value. It is levied on the sale of e-books, movies, music, games and other digital content and applies to foreign companies. The government says the tax could generate up to $45m in revenue by June.

“It’s not the right time and not the right idea,” Pandit says from Nairobi. “There are other ways to generate revenue. Kenya may be shooting itself in the foot.”

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