Civil society group has lauded President Uhuru’s administration for backing down on a tax rule being pushed by the United States of America.
The civil society has supported the Kenyan government for not agreeing to sign an agreement that is would have stopped Kenya from taxing multinational companies like Google, Facebook, and Amazon.
The group, dubbed The Tax Justice Network, a group campaigning for transparency, criticized the Paris-based Organization for Economic Cooperation and Development (OECD), for failing to live up to the “original ambition” of the plan, and said that the watered-down measures mean that only a “sliver of the profits” of multinationals will become taxable, while incentives to shift profits remain sizable.
OECD, currently with the full support of the Biden administration, has been pushing for a global minimum rate of tax on multinational companies. However, in Kenya, it seems to have rubbed the taxman on the wrong side.
Kenya had opted to pull out of supporting the Biden administration’s push for a global minimum rate of tax on multinational companies arguing the deal will stop Nairobi from collecting taxes from tech giants such as Google, Facebook, and Amazon.
With the current economic upheavals in many nations in Africa, it was highly unlikely that a country would drop from taxing multinationals – like Google and Facebook – yet they are reaping big as far the usage of their services, in especially Kenya, is concerned.
Confirming their dissatisfaction with the move, Kenya Revenue Authority (KRA) said that the country was not comfortable with some sections in the agreement that would force the country to drop the digital services tax of 1.5 percent of sales.
“Members who join the statement are obliged to withdraw their unilateral measures such as digital services tax and similar measures imposed on non-resident companies which do not have a physical presence in the market jurisdiction,” said Terra Saidimu, the KRA Commissioner in charge of Intelligence and Strategic Operations.
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