How we can ensure effective taxation of the digital economy

There is an unmistakable focus on the digital economy, both internationally and locally. The discussions have revolved around the disruptive and transformative nature of digitalisation of economic activities. Technological transformation exemplified by such pervasive digitalisation can enable societies and countries fast-track their socio-economic development. The digital economy is increasingly becoming ubiquitous in all sectors. It is having a bearing on how business is transacted in sectors as diverse as tourism, betting and gaming, retail, management and engineering consultancy, software development, services, entertainment, education, transport and logistics, and so on. In all these instances, productivity and competitiveness are attributed to the continuous adoption of technological innovations.

Within the Kenyan context, the widespread adoption of mobile money has not only facilitated financial inclusion, but has also made it more convenient and cheaper to transact business within and across borders. The statistics on the impact of mobile money are telling. According to the Central Bank of Kenya , total money transferred through mobile platforms was Sh3.64 trillion in 2017, jumping to Sh3.98 trillion in 2018.