Hi Linda,

My proposal is the legislators should slow down on this tax proposals and allow the market to grow. I will for instance pick on the Ajira Tax. On one hand the Government is trying to create a conducive  environment by building Infrastructure and providing tools for enhancing access on the other hand putting in place hurdles that make the incentives less attractive. Beyond Fintech, the digital space may not be as developed as we imagine, it still needs to be nurtured. I implore Parliament to confirm whether the new industries that they want to tax exist in the first place, i hope we are not importing acts from other Regions. Per the last Census we had just under 5 million e-commerce businesses in a country of 50 million. During COVID, the Government created incentives that allowed people to work online, this incentives may have created a false impression or bubble of a developed Digital Ecosystem. We may to investigate this before we end up with missed collection targets.

Regards

On Tue, May 21, 2024 at 10:27 AM Linda Wairure via KICTANet <kictanet@lists.kictanet.or.ke> wrote:

Dear Listers,

DAY 2: INCOME TAX ACT

Thank you for your continued active public participation in this discourse. As part of the Kenya ICT Action Network (KICTANet) ongoing efforts to ensure that the Finance Bill 2024 addresses the needs and concerns of all stakeholders in the ICT Sector, we are reaching out to gather your valuable feedback on several key proposals. Your input is crucial in shaping a balanced and effective tax policy.

Kindly review the summary highlight of the proposed amendments by the Finance Bill, 2024 in the ICT Sector as attached.

Summary of Proposed Changes

Proposal 1. Expansion of Scope of Digital Content Monetization

The definition of digital content monetization will be expanded to include creative works, creating/sharing material, and any other non-exempt materials. This will be subject to withholding tax at 5% for residents and 20% for non-residents.

Questions:

1.       What concerns do you have about the expanded definition of digital content monetization?

2.       How do you feel about the withholding tax rates on digital content payments for residents and non-residents?

3.       What amendments would you propose to the expanded definition of digital content monetization and adjustments to the withholding tax rates?

Proposal 2.  Royalty

The definition of royalty will be expanded to include payments for the use or right to use any software, proprietary or off the shelf, including related services. This proposed amendment, if assented into law, will lead to taxpayers being compelled to deduct withholding tax on payments related to any dealings with software at the prescribed rates for royalties. In particular, payments related to the purchase of software will also be subject to withholding tax.

Questions:

1.       What issues do you foresee with the expanded definition of royalty to include software-related payments?

2.       How might this change affect businesses dealing with software distribution or purchase?

3.       What changes would you suggest to the expanded definition of royalty to align with international practices?

Proposal 3. Repeal of Digital Service Tax (DST) and Introduction of Significant Economic Presence Tax (SEP Tax)

SEP Tax will replace DST, targeting non-residents without a permanent establishment in Kenya. The taxable profit is deemed to be 20% of gross turnover, taxed at 30%, expanding to include various digital services like ride-hailing and food delivery. Additionally, FB 2024 proposes to amend the definition of a digital market place to also include the following services provided online though an electronic platform: ride hailing services, food delivery services, freelance services, professional services, rental services, task-based services and any other service that is not exempt from tax under the ITA.

Questions:

1.       What concerns do you have about replacing DST with SEP Tax and its higher effective rate?

2.       How do you think the broader definition of digital marketplace services will impact service providers?

3.       What modifications would you propose to the SEP Tax to balance revenue generation and business impact?

PROPOSAL 4. Repeal of Tax Exemption on Income Earned Under the Ajira Digital Program

The 3-year income tax exemption for individuals registered under the Ajira digital program will be removed to increase tax revenue.

Questions:

1.       What are your thoughts on the repeal of the tax exemption for individuals in the Ajira digital program?

2.       How might this change impact individuals relying on the Ajira program for their income?

3.       What alternatives would you suggest to support individuals in the Ajira digital program while increasing tax revenue? How would you propose phasing out the exemption to minimize impact?

Your feedback is highly valued, and we encourage you to share your thoughts on any of these proposed amendments. Your perspectives are invaluable as we work towards promoting policies that support a thriving ICT ecosystem.

Should you have any questions or require further information, please do not hesitate to reach out to lgichohi@kictanet.or.ke . We are eager to hear your thoughts and insights on this crucial matter.

Thank you for your continued support and participation. We look forward to engaging with you in this discussion.

 Sincerely,

Linda Gichohi.

Kenya ICT Action Network.

 

 


On Mon, 20 May 2024 at 18:43, Steve Muchai <smuchai@gmail.com> wrote:
There are many more alarming proposals, especially the eco levy. The Bill seeks to introduce eco levy on computers, mobile phones, batteries, diapers...
There are great analysis documents available at the following links:


Kind regards,
Steve Muchai




On Tue, May 21, 2024 at 3:31 AM Linda Wairure via KICTANet <kictanet@lists.kictanet.or.ke> wrote:
Thank you so much for the Insights. Well noted.

On Mon, 20 May 2024, 18:14 Alloys Siaya, <alloys.siaya@gmail.com> wrote:
Dear listers,

Personal Data protection in Kenya is governed by the Data Protection Act of 2019. The Act gives effect to Article 31(c) and (d) of the Constitution of Kenya that contains the right to privacy which is a fundamental human right.


The mandate of the Office of the Data Protection Commissioner, as the regulator of matters data privacy in Kenya, and which derives from the Data Protection Act 2019, includes the following;

  • Regulation of the processing of personal data;
  • Ensuring that the processing of personal data of a data subject is guided by the principles set out in section 25 of the Act;
  • Protecting the privacy of individuals’ data;
  • Establishing the legal and institutional mechanism to protect personal data; and
  • Providing data subjects with rights and remedies to protect their personal data from processing that is not in accordance with the Act

In the ODPC role and functions, is included the following;

  •  Carrying out inspections (of public and private entities) with a view to evaluating the processing of personal data.
  • Exercising oversight on data processing operations to verify whether the processing of data is done in accordance with the Act;
  • Receiving and investigating any complaint by any person on infringements of the rights under the Act;
  • Carrying out inspections (of public and private entities) with a view to evaluating the processing of personal data;
  • Ensuring the country’s compliance on data protection obligations under international conventions and agreements; What the bill proposes risks infringement with international conventions

The exemption sought in the Bill would breach a fundamental human right, and introduce a gap of duplication, and risk, in the execution of the above mandate, and allow conflict with possibility of the exempted entity pursuing a contra and conflicting mandate in accessing and/or processing of personal/organizational data.

 

The proposal should be rejected/dropped.

Instead, the need/intention for the Bill proposal should be addressed using the existing data protection legal framework, which is sufficient within the context of the subject Bill requirement. Perhaps with empowering the ODPC where there is weakness in regulation/enforcement capacity.

Also, individuals should be encouraged to protect/take control of their personal data and to support organizations with their lawful processing of personal data.

Regards,
Alloys Siaya

On Mon, May 20, 2024 at 11:11 AM Linda Wairure via KICTANet <kictanet@lists.kictanet.or.ke> wrote:

Dear Listers,

Greetings from KICTANet!

Today marks the beginning of our three-day moderated online discussion and public participation on the Finance Bill, 2024. As a key stakeholder in the ICT sector, your insights are invaluable as we navigate crucial proposals related to revenue-raising measures.

PROPOSAL: The Data Protection Act

The Bill seeks to amend section 51 of the Data Protection Act (Cap. 411C) to provide for the exemption of the processing of personal data that relates to the assessment, enforcement or collection of any tax or duty from the provisions of the Data Protection Act.

This proposed amendment will give KRA unfettered access to citizens’ personal data that extend beyond financial data.

Question:

  1. What implications might the proposed amendment to exempt the processing of personal data related to tax or duty assessment, enforcement, or collection from the Data Protection Act have on individuals' privacy rights and the overall effectiveness of data protection measures in the context of taxation?

       2. What would you propose?

We look forward to your active participation in shaping policies that support a thriving ICT ecosystem.

Should you have any questions or require further information, please do not hesitate to reach out to lgichohi@kictanet.or.ke . We are eager to hear your thoughts and insights on this crucial matter.

 

Sincerely,

Linda Gichohi.

Kenya ICT Action Network

Top of Form

 


On Fri, 17 May 2024 at 11:04, Chepkoech Towett via KICTANet <kictanet@lists.kictanet.or.ke> wrote:
Greetings, 
Looking forward to the engagement. 

Regards, 
Chepkoech Towett. 

On Fri, 17 May 2024, 10:48 Linda Wairure via KICTANet, <kictanet@lists.kictanet.or.ke> wrote:

Dear Listers,

Greetings from KICTANet!

As a leading advocate for ICT policy and regulation, KICTANet is dedicated to fostering collaboration and promoting an enabling environment in the ICT sector. With our strategic objectives focused on effective multi-stakeholder participation, we are committed to engaging with stakeholders like you to ensure robust, rights-based policies.

We are reaching out to invite you to participate in the three-day moderated online mailing list discussion regarding the Finance Bill, 2024 (National Assembly Bills No. 30 of 2024). This bill contains crucial proposals related to revenue-raising measures, including the digital service tax, liability and collection of taxes. Your insights and contributions are vital as we navigate these proposals and their potential impact on the ICT sector.

The discussion will take place on the KICTANet mailing list from Monday, May 20th to Wednesday, May 22nd . Each day of the discussion will focus on specific aspects of the Finance Bill, 2024, allowing us to delve into its provisions and implications.

We encourage you to review the Finance Bill, 2024  link attached and the template format of submission of the memorandum. We shall include a matrix presentation outlining our concerns and proposals regarding relevant provisions of the Finance Bill, 2024. Your feedback and perspectives are invaluable as we work towards promoting policies that support a thriving ICT ecosystem.

http://www.parliament.go.ke/sites/default/files/2024-05/Finance%20Bill%2C%202024.pdf

Should you have any questions or require further information, please do not hesitate to reach out to lgichohi@kictanet.or.ke . We are eager to hear your thoughts and insights on this crucial matter.

Thank you for your continued support and participation. We look forward to engaging with you in this discussion.

Sincerely,

Linda Gichohi.

Kenya ICT Action Network.


 

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KICTANet is a multi-stakeholder Think Tank for people and institutions interested and involved in ICT policy and regulation.
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of Policy Advocacy, Capacity Building, Research, and Stakeholder Engagement.

KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's
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KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's
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--
Kind Regards,
Steve Muchai
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KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's
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--
Barrack Otieno
Trustee
Kenya ICT Action Network (KICTAnet)
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https://www.linkedin.com/in/barrack-otieno-2101262b/
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