Ride-hailing service pioneer, Uber, has asked for clarity from the Kenyan government, regarding the recently proposed tax on online firms.
The Finance Bill 2019 proposed that income accrued through digital marketplaces by any firm operating within the country, be considered taxable income in Kenya.
Uber said it is not against taxation but instead requires clarity on the matter to avoid possibly damaging litigation due to misinterpretation.
The firm has proposed the insertion of a conditional clause on the Income Tax Act amendment, that compels all operators to adhere to the regulations set by the Treasury.
Uber’s legal advisor, Nikhil Hira, said, “That will then allow those in the industries who are in this digital market place to link up with Treasury and the Kenya Revenue Authority to get the right definitions in place for us to deal with this.”
He added that Kenya should study countries with similar tax measures as the proposed such as India, Singapore and Malaysia.
The FANG (Facebook, Netflix, Google, Amazon) companies, as well as many local and international ride-hailing firms, eCommerce market places and numerous local individual developers will be targeted by the new tax.
Earlier on Google had warned that the move would place Kenya at risk of trade wars with other countries.
It added that the amendment is in conflict with the international tax system which states that companies should pay majority of their corporate tax in the countries in which their products were developed, as opposed to where they are consumed.
