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Kenya: KRA-OECD in Talks Over Win-Win Digital Tax Regime

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4 years ago

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Nairobi — The Kenya Revenue Authority (KRA) and the Organisation for Economic Co-operation and Development (OECD), Centre for Tax Policy and Administration, have commenced discussions on their collaboration on the Two-Pillar Approach by the Inclusive Framework and other areas of mutual interest.

As part of the implementation of the Two-Pillar approach, countries and jurisdictions commit to a standstill or withdraw measures such as Digital Services Tax (DST).

The deal that is expected to come into effect in 2024, has currently been consented to by 137 out of the 141 OECD Inclusive Framework countries and jurisdictions.

Kenya is one of the four countries that have not signed.

Other countries that have not signed include Nigeria, Pakistan, and Sri Lanka.

The meeting was a key step towards anticipating the possible benefits and concerns of the two-pillar international tax deal and also provided an opportunity to share the Kenyan experience of the Digital Service Tax.

“Kenya has welcomed the technical discussions on all aspects of the deal and will consider its position,” read a communique from KRA and OECD.

The OECD Inclusive Framework (IF) proposes a Two-Pillar solution to address the tax challenges of the digitalized economy.

Pillar One’s aim is to ensure fair distribution of profits and to allocate taxing rights to the countries with respect to the largest Multinational Enterprises (MNEs).