Treasury Cabinet Secretary John Mbadi has clarified that the proposed 15% tax on social media and internet services targets platform owners, not Kenyan users.
He argued it is unfair for foreign companies to benefit from government infrastructure without paying taxes while Kenyans bear the burden.
Speaking in Parliament, Mbadi dismissed claims that the government is targeting social media users to boost revenue. The Tax Laws (Amendment) Bill, 2024, currently before the National Assembly, proposes the tax on fees charged to users for accessing these platforms.
“I have heard people talk about social media then they say our people are very creative, which is true. They are using platforms of people out there, why would we just tax our Kenyans who are using that platform yet the owners are not paying anything?” he posed.
“We are saying if you are doing business here and you are out there you must leave part of the proceeds here to benefit this economy,” he stated.
However, Kenyans fear the costs may be passed on to consumers through higher internet charges. The bill also seeks to amend the Income Tax Act to introduce a significant economic presence tax.
In a bid to address the cost of communication services, the Bill also proposes a reduction in the exercise duty on telephone and data services from the current 15 per cent to 12 per cent.
Mbadi added the particular companies are currently using internet connectivity which the taxpayers are paying for.