Taxation and Electronic Commerce: an Assessment of the Kenyan Legal and Regulatory Framework

Abstract

This research project is aimed at analyzing the proficiency of Kenyan legal as well as regulatory framework in regulating taxation of electronic commerce in Kenya. The study addresses the following objectives: To identify the various modes and means by which taxation of electronic commerce is done as well as its impact; to identify and appraise the current legal, regulatory and institutional framework governing the taxation of electronic commerce in Kenya; and to propose measures and recommendations that can be employed to ensure effective assessment and taxing electronic commerce in Kenya. The main study methodology is desktop research conducting mainly based on available literature material. The study undertakes an in-depth analysis of the Kenyan regulatory framework governing taxation of the digital economy. This thesis also identifies various challenges and successes that have emanated out of the regulatory framework for taxing e-commerce. The study avers that Kenya has developed a robust framework for taxation of electronic commerce over the years by setting in place a regulatory framework on the same. The study proposes various measures to streamline electronic commerce taxation including, increased public awareness, introduction of minimum taxable amount, development of monitoring and evaluation policy to improve efficiency in tax collection, as well as cross boarder collaboration to minimize instances of tax avoidance and tax evasion.