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Treasury Targets Digital Economy In The Marketplace With New Tax Measures
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Nov 1, 2024
Treasury CS John Mbadi, through the Tax Laws (Amendment) Bill, 2024, has proposed a raft of tax proposals, amongst which includes amending Section 3 of the Tax Income Act and expanding the definition of the digital marketplace to include ride-hailing services, food delivery services, freelance services, and professional services, among others. WATCH: -New Tax By Treasury: https://youtu.be/nFHQHJH49b8
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all right everyone welcome back we're
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diving deep today and this time it's
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something that could hit pretty close to
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home for a lot of you in Kenya yeah
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definitely impactful we're looking at
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the digital economy specifically some
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new tax proposals it's all laid out in
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this article we found from name of
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publication CS embody unveils new tax
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proposals targeting digital economy kidy
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title right definitely grabs your
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attention and it's not just some
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abstract Economic Policy this stuff
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affects like how we live every day
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exactly we're talking ride sharing
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getting food delivered even how some
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people earn their living online so let's
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break this down and see what's really
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going on well the backdrop here is that
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Kenya's treasury they're looking to
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increase Revenue seems they fell a bit
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short of their targets happens to the
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best of us right but their solution is
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interesting they're eyeing the digital
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economy this booming sector yeah and
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they want to broaden what's considered
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the digital Marketplace for tax purposes
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so it's not just like the App Store
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taking a cut it's deeper than that who
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are they actually targeting with this so
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there's a few key players think Ry
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haling the big names like bolt Uber safe
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bota all those right which are huge GE
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here I read somewhere Kenya has the
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third highest ride hailing adoption rate
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in all of Africa crazy 46% it's no small
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thing but it's not just them it's also
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food delivery services gloo jimia Foods
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Uber Eats all that oh yeah those late
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night cravings adding to the tax man's
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Delight huh guess you could say that and
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then it it's broader freelance platforms
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people offering Professional Services
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online that whole world which is huge e
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now right right like how much money are
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we talking about flowing through this
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digital space well projections for the
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entire African online food delivery
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Market by 2024 are around 13.75 billion
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US waa that's a lot of sosis but what
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about just within Kenya specifically
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here online food delivery by 2029 is
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estimated to be worth 81.7 billion
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Kenyon Shillings so yeah big money see
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now those numbers make it clear why the
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government's interested but what's their
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justification Beyond just we want to cut
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they frame it as fairness basically
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everyone benefiting from economic growth
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should contribute right so these digital
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platforms they need to pay their share
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just like traditional businesses so
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Level Playing Field kind of thing yeah
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but hold on when they say platforms do
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they mean like me ordering a pizza or no
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no their focus is on the platform owners
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the companies themselves not the
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individual users or the people working
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through them okay that's important to
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clarify but still even if it's aimed at
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the big guys there's got to be some
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ripple effect right oh absolutely this
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could impact a lot of Kenyans drivers
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Freelancers consumers everyone's in the
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mix and not always in a good way I
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imagine what are some of the potential
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downsides they're talking about well for
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consumers the most obvious one is higher
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prices companies pass on the tax burden
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your ride or meal suddenly costs more
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yeah no one likes that and for the folks
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actually working in this digital economy
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like Freelancers what happens to them
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things could get complicated they might
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need to register as official businesses
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deal with more tax paperwork all that
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imagine you're happily designing
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websites from your couch suddenly you're
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filing forms like a corporation big
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shift definitely adds a layer of
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bureaucracy for sure and it's not just
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the hassle it's also the cost if those
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fees get too high it can discourage
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people exactly someone might be thinking
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is freelancing even worth it anymore
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more and then the whole system suffers
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that's the fear basically but look it's
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still early days for these proposals
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they got to go through Parliament lots
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of debate to come plus this isn't even
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the only thing on the table right the
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article mentioned a whole bunch of other
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bills CSM bat is proposing yeah like tax
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procedures Public Finance lots of moving
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Parts we're probably just seeing the tip
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of the iceberg here which makes me
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wonder what's the long-term Vision how
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will this reshape Kenya's digital
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landscape years down the line that's the
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million question isn't it will it
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actually Foster Innovation help the
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economy grow or will it just be a burden
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and I guess that's where our listeners
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come in if you're part of this digital
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world how do you feel about these
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changes yeah what does it mean for your
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work your daily life it's a conversation
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worth having because this affects us all
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exactly so stay informed stay engaged
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and keep those questions coming we're
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all figuring this out together
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absolutely we'll be keeping a close eye
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on things as they develop and until next
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time keep on diving deep
#E-Commerce Services
#Legislative Branch
#Public Policy
#Taxi & Ride Hail Services