Enforcement of the Digital Economy Taxation

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dc.contributor.authorKapkai, Philip
dc.contributor.authorMuthee, Irene
dc.contributor.authorNgala, Bonaventure
dc.contributor.authorMusa, Nuh
dc.contributor.authorWanyeri, Ann
dc.contributor.authorGathoni, Evelyn
dc.date.accessioned2022-06-14T07:39:44Z
dc.date.available2022-06-14T07:39:44Z
dc.date.issued18-08-21
dc.description.abstractKenya has seen tremendous growth in the use of technology with internet penetration at 89.5% of the population as at December 2019. Intense reliance on technology has been noted hence causing a huge transformation in the business environment. Finance Act 2019 (the “FA 2019”) amended the Income Tax Act to provide for taxation of income accruing through the digital market place. Taxation of digital economy has imposed new enforcement challenges to tax policymakers, tax authorities and governments. The challenges are attributed to complex nature of transactions carried out in the digital economy. The study identified several gaps such as difficulty in determining transactional value on income accrued or received in Kenya as harboured by jurisdiction issues in which value creation occurred. The gap will be addressed by review and amendment of Kenya’s double tax treaties, KRA and Communication Authority of Kenya to liaise in mapping of IP addresses to help in tracking transactions. Additionally, it is important to frame the DST around various revenue streams. Further, the research proposed raft of changes in the DST Act to minimise the potential for tax evasion and avoidance. Considering the legal perspective, the current Kenyan concept of permanent establishment especially regarding digital tax, does not establish a taxable presence. This is because it is mainly based on an entity as being physically present or having a physical representative in the country. Therefore, it will be necessary to come up with parameters defining what amounts to a digital permanent establishment (PE) or circumstances that will trigger a digital PE in Kenya. Without a nexus, KRA runs the risk of countless disputes.en_US
dc.identifier.citationPhilip, K., Muthee, I., Ngala, B., Musa, N., Wanyeri, A., & Gathoni, E. (2021). Enforcement of the Digital Economy Taxation. African Tax and Customs Review, 4(1), 23. Retrieved from https://atcr.kra.go.ke/index.php/atcr/article/view/72en_US
dc.identifier.issn2664-9527
dc.identifier.issn2664-9535
dc.identifier.urihttps://ikesra.kra.go.ke/handle/123456789/2075
dc.identifier.urihttps://atcr.kra.go.ke/index.php/atcr
dc.language.isoenen_US
dc.publisherKenya School of Revenue Administrationen_US
dc.subjectintelligence-drivenen_US
dc.subjectbig dataen_US
dc.subjectanalyticsen_US
dc.subjectcustomsen_US
dc.subjectmachine learningen_US
dc.titleEnforcement of the Digital Economy Taxationen_US
dc.typeArticleen_US

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