Lawyers’ Hub meet up on ‘Taxing the digital economy’
- CIPIT |
- January 30, 2020 |
By AbdulMalik Sugow & Jentrix Wanyama
On 24th January 2020, the Lawyers Hub held its first #LawTechMeetUp of the year, which was live streamed to partners across the continent. Against the backdrop of the recent amendments to the Finance Act, together with insights from a similar session held at the just concluded World Economic Forum, the event entailed a discussion on Taxing the Digital Economy, particularly in the African context.
The evening kicked off with a presentation on the existing global frameworks on taxing the digital economy by Vallarie Yiega of the Committee for Fiscal Studies, University of Nairobi. The elements of the digital economy identified included e-commerce, online payment services, applications, online advertising and cloud computing. Ms Yiega’s presentation also identified various taxation guidelines in development by organizations such as the Organisation for Economic Co-operation and Development (OECD), the United Nations Tax Committee (UNTC) and the African Tax Administration Forum (ATAF).
Following Ms. Yiega’s presentation, a panel discussion was convened consisting of Anne Salim (Association of Startup & SMEs Enables of Kenya), Esther Muchiri Otieno (Catholic University of Eastern Africa), Wangoi Karuga (Anjarwall & Khanna) and Robert Maina (Ernst & Young). The discussions revolved around the difficulties posed by rapid digitisation of services where existing laws are not fit for purpose. An interesting debate emerged on the utility of attempting to tax digital economies, particularly nascent ones. Some panelists were of the opinion that perhaps the imposition of taxes on upcoming digital business are a hindrance to innovation; while others were of the mantra that Caesar ought to get his due, digital economy notwithstanding.
Contributions were also made regarding the role (or lack thereof) played by the Global South in the development of an international consensus on taxing multinationals. As mentioned, different frameworks are in development. It was sobering to consider whether developing countries have a seat at these tables, and if so, how much impact they have in shaping the narrative. Considering Africa’s attractive market, and the growing presence of multinationals in the region, the desire for an objective approach is paramount. The need for integration and unity between developing countries was clear as this would provide a greater bargaining power.
Questions raised from the audience varied from data protection concerns, to, humorously, tips on tax evasion. (The latter was swiftly put to rights by an official from the Kenya Revenue Authority who was in attendance). There were also entrepreneurs in attendance who wanted to know more about how to best abide by the law while protecting their businesses. The panelists together with lawyers and industry players in the audience responded brilliantly to all questions raised. All in all, the #LawTechMeetUp was a resounding success, and CIPIT looks forward to taking part in future events.