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.”
