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OECD Urges Kenya to Drop Plan to Double Digital-Services Tax

  • Kenya is among the few global minimum-tax-plan holdouts
  • Looks to raise revenue collections to plug budget deficit
Downtown Nairobi.
Downtown Nairobi.Photographer: Fredrik Lerneryd/Bloomberg

Kenya should join the global minimum-tax deal instead of pushing for unilateral measures, the Organization for Economic Co-operation and Development said in comments about the nation’s plans to double its digital levy.

The East African country’s National Treasury seeks to increase its digital-services tax to 3% from 1.5%, according to the Finance Bill 2022. The proposal on the levy, which applies to foreign companies that provide online services in Kenya, will become effective if lawmakers approve it and the president signs it into law.