Kenya Drops Plan to Support Global Minimum Tax

Kenya Drops Plan to Support Global Minimum Tax

US President Joe Biden

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Kenya has let go of plans to support the global minimum tax driven by the United States President Joe Biden.

The United States of America President wants multinational companies to back up the tax deal.

According to Paris Based Organization for Economic Cooperation and Development, Kenya is missing among 132 countries that have backed the agreement.

The standstill is said to be as a result of clauses in the agreement which Kenya finds uncomfortable.

The agreement was to compel Kenya to drop the digital services levy of 1.5 percent of gross sales by Google, Facebook, and Amazon.

 Additionally, Ireland, Estonia, and Hungary are among the European countries taking part in the protest against the global minimum tax rate.

The countries are maintaining that it will carry off a tool for attracting investors.

The Global Minimum Tax

 Further, Nigeria and Algeria have joined Kenya as top African economies yet to support the deal.

Besides Egypt, South Africa, and Morocco.

The countries are believed to be major African economies that have backed the agreement of the deal.

 Countries like China and India had reservations earlier about the proposed tax.

However, they are now supporting the US administration’s push for a global minimum tax rate.

It is also believed that the leaders from the G-20 October Summit will support the global minimum tax rate with intentions to implement it by the year 2023.

Failure to the International agreement, the United States planned tax increases.

The increase could lead the countries to relocate their headquarters to other low-tax countries.

According to the US Treasury Department’s website, lauding the deal has confirmed the removal of all Digital Services Taxes.

As well as other relevant measures on all companies.

Taxed on revenue rather than profit, the excise duties have become a soaring popular way for counties to balance their budget.

 Facebook and Google have already applauded a Group of 7 (G7) rich countries’ agreement to create a global minimum of 15 percent corporate tax rate.


According to experts, Nairobi downplayed to have their support due to a clause that demands countries scrap the hiking famous Digital Services Taxes.

The DTS will require Kenya to drop its own digital services tax that came into operation in early January 2021.

 Moreover, the sale of e-books, movies, games, and music.

As well as other digital content which applies to foreign companies is levied.

Kenya Revenue Authority (KRA), has revealed that the DST could generate up to Ksh.13.9 billion in revenue in the next three years.

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