Connect with us

Business News

KRA meets with OECD experts on taxing digital economy

Published

on


Kenya Revenue Authority (KRA) and the Organization for Economic Co-operation and Development (OECD), Centre for Tax Policy and Administration (CTPA), held cooperation and partnership meetings to discuss challenges of taxing a digital economy.

The meetings were held on 24th to 26th January 2022, in Kenya, and were led by KRA Commissioner General Githii Mburu and the Director of the OECD’s Centre for Tax Policy and Administration Pascal Saint-Amans.

KRA Commissioners, an OECD Secretariat team and experts from the National Treasury and Ministry of Foreign Affairs also participated.

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

KRA welcomed the technical discussions on all aspects of the deal and will consider its position.

The meeting also discussed a number of other areas of cooperation which will strengthen the close partnership going forward.

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).

Pillar Two provides a global minimum corporate tax rate, with a proposal of 15% effective tax rate, that countries can adopt to put a floor under tax competition.

As part of the implementation of the Two-Pillar approach, countries and jurisdictions commit to 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 4 countries that have not signed. Other countries that have not signed include Nigeria, Pakistan, and Sri Lanka.

The OECD pledged to continue lending its support in the African Tax and Crime Academy by exploring opportunities for enhanced numbers of cohort training due to the high training demand.

KRA is said to be working to implement the two-pillar approach

KRA participation in the OECD Forum of Tax Administration was lauded as an important source of experience sharing that will be utilized in the ongoing digitalization and data governance process at KRA.

Implementation of the OECD Common Reporting Standards (CRS) are at an advanced stage. Kenya said it will continue working with the OECD to ensure successful implementation.

Both parties agreed to continue pursuing multi-lateral and bilateral approaches towards the adoption of the two-pillar approach.

ALSO READ: Kenya Cautious on Multinational firms’ Digital Tax Reforms



Source link

Comments

comments

Facebook

Trending