<div dir="ltr"><div class="gmail_default" style="font-family:georgia,serif">Ephraim</div><div class="gmail_default" style="font-family:georgia,serif"><br></div><div class="gmail_default" style="font-family:georgia,serif">This is an important topic. I suggest that we take this one seriously. We must prepare a substantive response to the bill and make our representations super clear. </div><div class="gmail_default" style="font-family:georgia,serif"><br></div><div class="gmail_default" style="font-family:georgia,serif">Regards</div><div class="gmail_default" style="font-family:georgia,serif"><br></div><div><div dir="ltr" class="gmail_signature" data-smartmail="gmail_signature"><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div dir="ltr"><div dir="ltr"><div dir="ltr"><div dir="ltr"><div dir="ltr"><div dir="ltr"><p style="margin:0in 0in 0pt"><b><font face="georgia, serif" size="2">Ali
Hussein</font></b></p><p style="margin:0in 0in 0pt"><b><font face="georgia, serif" size="2">Principal</font></b></p><p style="margin:0in 0in 0pt"><font face="georgia, serif" size="2"><b>AHK & Associates</b></font></p><font size="2">
</font><p style="margin:0in 0in 0pt"><font size="2"> </font></p><p style="margin:0in 0in 0pt"><font size="2"><span style="font-family:georgia,serif"><span>T<font size="2">el: +254 713 60<font size="2">1113</font></font><br></span></span></font></p><p style="margin:0in 0in 0pt"><font size="2"><span style="font-family:georgia,serif"><span>Twitter: @AliHKassim</span><span></span></span></font></p><font size="2"><span style="font-family:georgia,serif">
</span></font><p style="margin:0in 0in 0pt"><font size="2"><span style="font-family:georgia,serif"><span>Skype: abu-jomo</span></span></font></p><p style="margin:0in 0in 0pt"><font size="2"><span style="font-family:georgia,serif"><span>LinkedIn: <a href="http://ke.linkedin.com/in/alihkassim" target="_blank">http://ke.linkedin.com/in/alihkassim</a></span><a href="http://ke.linkedin.com/in/alihkassim" target="_blank"><span style="color:windowtext;text-decoration:none"></span></a></span></font></p><p style="margin:0in 0in 0pt"><font size="2"><span style="font-family:georgia,serif"><br></span></font></p><p style="font-size:small;margin:0cm 0cm 0.0001pt;background-image:initial;background-position:initial;background-repeat:initial"><span style="font-size:9pt;font-family:georgia;color:black"><br></span></p><font size="2"><span style="font-family:georgia,serif"><span><br><font size="1">Any information of a personal nature expressed in this email are purely mine and do not necessarily reflect the official positions of the organizations that I work with.</font></span></span></font><span style="font-family:"Baskerville Old Face",serif;font-size:11pt"></span><span style="font-size:11pt"></span>
<span style="font-family:"Baskerville Old Face",serif"></span></div></div></div></div></div></div></div></div></div></div></div></div></div><br></div><br><div class="gmail_quote"><div dir="ltr" class="gmail_attr">On Wed, Aug 7, 2019 at 8:08 PM Ephraim Percy Kenyanito via kictanet <<a href="mailto:kictanet@lists.kictanet.or.ke">kictanet@lists.kictanet.or.ke</a>> wrote:<br></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex">
<div bgcolor="#FFFFFF">
<p><font face="Gentium Book Basic"><b>Kenya:-</b> Kenya Finance Bill
2019:- Taxation of digital economy</font></p>
<p><font face="Gentium Book Basic">In order to tap into the fast
growing digital economy, the Bill proposes to tax income
accruing through a digital marketplace by introducing a new
charging section.<br>
</font></p>
<p><font face="Gentium Book Basic"> Although this is a welcome move
to increase the tax base, it is still not clear how
international digital platforms with no physical presence in
Kenya will be taxed. In this regard, it is expected that special
rules may soon be formulated detailing the operational mechanics
of how taxation of the digital economy will be undertaken. (It
can be found here:-
<a class="gmail-m_420769296974190877moz-txt-link-freetext" href="http://www.parliament.go.ke/sites/default/files/2019-07/Finance%20Bill%2C%202019_compressed.pdf" target="_blank">http://www.parliament.go.ke/sites/default/files/2019-07/Finance%20Bill%2C%202019_compressed.pdf</a>)</font></p>
<div><font face="Gentium Book Basic">Below are the relevant portions
of the proposed laws:</font></div>
<font face="Gentium Book Basic"><span id="gmail-m_420769296974190877gmail-docs-internal-guid-a214aae0-7fff-3118-9720-5359911ed588"><br>
<ul style="margin-top:0px;margin-bottom:0px">
<li dir="ltr" style="list-style-type:disc;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">Section 3: Section 3 of the Income Tax Act is proposed to be amended by inserting the words highlighted:</span></p></li>
<ul style="margin-top:0px;margin-bottom:0px">
<li dir="ltr" style="list-style-type:circle;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">(1). Subject to, and in accordance with this act, a tax to be known as income tax shall be charged each year of income upon all the income of a person, whether</span><span style="font-size:11pt;background-color:rgb(0,255,0);font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"> resident or non-resident</span><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">, which accrued in or was derived from Kenya</span></p></li>
<li dir="ltr" style="list-style-type:circle;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">(2). Subject to this Act, income upon which tax is chargeable under this Act is income in respect of</span></p></li>
<ul style="margin-top:0px;margin-bottom:0px">
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">A. Gains or profits from:</span></p></li>
<ul style="margin-top:0px;margin-bottom:0px">
<li dir="ltr" style="list-style-type:disc;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">Any business, for whatever period of time carried on;</span></p></li>
<li dir="ltr" style="list-style-type:disc;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">Any employment or services rendered;</span></p></li>
<li dir="ltr" style="list-style-type:disc;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">Any right granted to any other person for use or occupation of property;</span></p></li>
</ul>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">B. Dividends or interest</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">C. a pension, charge or annuity; ii. Any withdrawals from, or payments out of, a registered pension fund or a registered provident fund or a registered individual retirement fund; and (iii) any withdrawals from a registered home ownership savings plan</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:rgb(255,255,0);font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">D.income chargeable to tax includes income accruing through a digital marketplace</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:rgb(255,255,0);font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">e. ‘Digital marketplace’ means a platform that enables the direct interaction between buyers and sellers of goods and services through electronic means</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">E. AN amount deemed to be the income of any person under this Act or by rules made under this Act;</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">F. Gains accruing in the circumstances prescribed in, and computed in accordance with, the Eight Schedule</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">G. Subject to section 15(5A), the net gain derived on the disposal of an interest in a person, if the interest derives twenty per cent or more of its value, directly or indirectly, from immovable property in Kenya; and</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">H. A natural resource income</span></p></li>
</ul>
</ul>
<li dir="ltr" style="list-style-type:disc;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">Section 5 of the Value Added Tax Act, 2013 is proposed to be amended by inserting the words highlighted</span></p></li>
<ul style="margin-top:0px;margin-bottom:0px">
<li dir="ltr" style="list-style-type:circle;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">1. A tax, to be known as the value added tax, shall be charged in accordance with the provisions of this Act on - </span></p></li>
<ul style="margin-top:0px;margin-bottom:0px">
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">(a). A taxable supply made by a registered person in Kenya</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">b. The importation of taxable goods; and</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">c. The supply of taxable services</span></p></li>
</ul>
<li dir="ltr" style="list-style-type:circle;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">2. The rate of tax shall be:</span></p></li>
<ul style="margin-top:0px;margin-bottom:0px">
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">A. in the case of zero-rated supply, 0% or</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">In the case of goods listed in section B of the first schedule 8%</span></p></li>
<li dir="ltr" style="list-style-type:square;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">In any other case, 16% of the taxable value of the taxable supply, the value of imported taxable goods or the value of a supply of imported taxable services.</span></p></li>
</ul>
<li dir="ltr" style="list-style-type:circle;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:rgb(255,255,0);font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">...7. The provisions of subsection (1) shall be applicable to supplies made through a digital marketplace</span></p></li>
<li dir="ltr" style="list-style-type:circle;font-size:11pt;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap"><p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style="font-size:11pt;background-color:rgb(255,255,0);font-variant-numeric:normal;font-variant-east-asian:normal;vertical-align:baseline;white-space:pre-wrap">8. For the purposes of this section, a ‘digital marketplace’ means a platform that enables the direct interaction between buyers and sellers of goods and services through electronic means</span></p></li>
</ul>
</ul>
</span></font>
<div>
<div>
<p><span style="font-family:"Trade Gothic LT Std"" face="Trade Gothic
LT Std"><span style="color:rgb(136,136,136);line-height:normal;font-family:"trebuchet ms",sans-serif;font-size:16pt">-- </span> </span> </p>
<div>Best Regards,<br>
</div>
<div style="color:rgb(136,136,136);line-height:normal;font-family:arial,sans-serif;font-size:12.8px">
<div dir="ltr">
<div dir="ltr">
<div style="font-size:12.8px" dir="ltr"><span style="color:rgb(255,0,0)">Ephraim Percy Kenyanito</span><br>
</div>
<div style="font-size:12.8px" dir="ltr"><span style="color:rgb(0,0,0);font-family:"helvetica neue";font-size:14.16px"><span style="color:rgb(0,0,0);font-family:"helvetica neue";font-size:14.16px">Digital Program Officer</span><br>
</span></div>
<div style="font-size:12.8px" dir="ltr"><br>
</div>
<div style="font-size:12.8px" dir="ltr"> <strong style="color:rgb(255,0,0);font-family:"helvetica neue";font-size:12.8px">ARTICLE
19 EASTERN AFRICA<br>
</strong></div>
<div style="font-size:12.8px" dir="ltr"><strong style="color:rgb(0,0,0);font-size:12.8px">DEFENDING
FREEDOM </strong><span style="color:rgb(0,0,0)"><strong>OF
EXPRESSION AND INFORMATION</strong></span></div>
<div style="font-size:12.8px" dir="ltr"><span style="font-family:"helvetica neue""><span style="color:rgb(51,51,51);font-size:10pt"><span style="color:rgb(0,0,0)" color="#000000">W</span> </span></span><span style="font-family:"helvetica neue""><u><span style="color:rgb(111,22,22)" color="#6f1616"><span style="color:rgb(51,51,255)" color="#3333ff"><span style="font-size:10pt"><span class="gmail-m_420769296974190877Object" id="gmail-m_420769296974190877OBJ_PREFIX_DWT6930_com_zimbra_url"><a class="gmail-m_420769296974190877moz-txt-link-freetext" href="https://www.article19.org/regional-office/eastern-africa/" target="_blank">https://www.article19.org/regional-office/eastern-africa/</a></span></span></span><br>
</span></u></span><span style="font-family:"helvetica neue""><span style="color:rgb(51,51,51);font-size:10pt"><span style="color:rgb(0,0,0)" color="#000000">Tw</span> <span style="color:rgb(102,102,102)" color="#666666"><span style="color:rgb(51,51,255)" color="#3333ff">@article19eafric</span></span></span></span><span style="font-family:"helvetica neue""><br>
</span></div>
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</div>
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<span style="font-family:"helvetica neue""><span style="font-size:10pt">Fa</span><span style="color:rgb(51,51,51);font-size:10pt"> </span><u><span style="color:rgb(111,22,22)" color="#6f1616"><span style="color:rgb(51,51,255)" color="#3333ff"><span class="gmail-m_420769296974190877Object" id="gmail-m_420769296974190877OBJ_PREFIX_DWT125_com_zimbra_url"><span class="gmail-m_420769296974190877Object" id="gmail-m_420769296974190877OBJ_PREFIX_DWT6931_com_zimbra_url"><a style="font-size:10pt" href="http://facebook.com/article19org" target="_blank">facebook.com/article19org</a></span></span></span><br>
</span></u><span style="font-size:13.33px"><span style="font-size:10pt">PGP </span></span><span style="color:rgb(136,136,136);font-size:13.33px"><span style="color:rgb(0,0,0)" color="#000000">Fingerprint:</span> <span style="color:rgb(51,51,255)" color="#3333ff">B0FA394AF73DEB7AA1FDC7360CFED26DE6BA8DC1</span></span></span><span style="font-family:garamond,"new york",times,serif"><span style="color:rgb(136,136,136);font-size:13.3333px"><br>
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.<br>
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