By Criss
By Elijah Ntongai
The Kenyan government aims to boost tax collections from the growing digital economy by proposing amendments to the Income Tax Act through the Finance Bill 2024. This move seeks to provide a clearer definition of a digital marketplace, including platforms for ride-hailing and freelance services.
As the digital economy gains traction in Kenya, many youths rely on it as a significant source of income. However, the legal definitions related to the digital economy have remained vague. The proposed Finance Bill 2024 aims to address this by further defining the digital marketplace.
According to the Income Tax Act, a digital marketplace refers to an online or electronic platform that enables users to sell or provide services, goods, or other property to other users. If passed into law, the amendments will enhance this definition, covering various services such as ride-hailing, food delivery, freelance work, professional services, rental services, and task-based services.
The implications of the Finance Bill 2024 are significant for Kenyans earning from digital services. Taxi drivers and companies offering ride-hailing services (e.g., Bolt, Uber, and Little) will now be subject to taxation. Additionally, income from delivering food orders placed online will also be taxed.
Given Kenya’s high unemployment rates, many youths turn to freelance and task-based online jobs for income. The bill ensures comprehensive coverage of income earned from platforms like Remotasks, Fiverr, Upwork, and other freelance services.
These online freelance opportunities, often paid in dollars, provide a lifeline for many Kenyans and contribute to the country’s digital economy growth
