• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business

‘Kenya may be shooting itself in the foot’ with digital services tax – Fedha CEO

4 years ago
in Business, highlights, Home, home-news, latest News, Technology
2 min read
0 0
0
68
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Kenya’s tax on digital services risks stifling the development of the country’s high-tech sector, Dhruv Pandit, CEO of Kenyan real-estate company Fedha, tells The Africa Report.

The digital services tax, which came into effect at the start of January, is 1.5% of gross transaction value. It is levied on the sale of e-books, movies, music, games and other digital content and applies to foreign companies. The government says the tax could generate up to $45m in revenue by June.

“It’s not the right time and not the right idea,” Pandit says from Nairobi. “There are other ways to generate revenue. Kenya may be shooting itself in the foot.”

Looking for cash

The Kenya Revenue Authority in June set up a special unit to track revenue on every digital transaction. Pandit says he understands where the government is coming from. It needs to increase the tax base and has limited available options.

The government is struggling with is high debt levels amidst the downturn that Covid-19 has caused.

Kenya has the potential to become an African tech hub and financial-services back offices could be run from the country, he says.

The country has good connectivity, Pandit says, and he expects last-mile connection costs to fall. The reality, though, is that “we are not a tech-friendly place.”

RelatedPosts

Gov’t Increases Producer Price of Cocoa to GHS 51,660 per Tonne for 2025/2026 Season

Value of Mobile Money Transactions Hit GHS 323.2bn in June

Alex Mould Questions BoG’s 25% Policy Rate Amid Ample Market Liquidity and Falling Inflation

However, a recent report from the Harvard Business Review touts Kenya’s tech prowess and opportunities.

Low-value hurdles

According to KPMG, the lack of a turnover threshold for the tax could lead to significant administrative burdens for companies with low-value transactions.

  • “Many jurisdictions that have introduced a digital services tax have set thresholds to align the expected tax collections to the cost of compliance,” the firm says.
  • KPMG also cites the short timeframe for the new tax as leaving little time for companies to put compliance measures in place.
  • In Kenya, as in much of Africa, trade in services as opposed to goods, needs to come to the fore, says Pandit. “Much of the creative economy doesn’t work in Africa.” Free trade is “the only way we can bootstrap ourselves out. We have no choice.”
Real-estate prospects

Pandit sees the outlook for the Kenyan economy as “very bumpy” in the short term. The government, he notes, is unable to borrow cheaply like its counterparts in the West. Still, a growing population and urbanisation are long-term trends that will be unaffected by Covid-19, he says.

Fedha invests in real-estate in Nairobi and rents its properties to residential and commercial tenants. Pandit expects that the demand for corporate office space will continue to grow after the pandemic, though perhaps at a slower rate.

The trend of working at home is not as prevalent as some people assume, he says. Office workers still need to access quiet space. “Homes are noisy,” he says.

The Kenyan real-estate market has held up due to the limited availability of credit in the years before the Covid-19 pandemic, which meant that there was no bubble in prices, says Pandit.

Still, it will take time for oversupply to be cleared and a lasting recovery in real-estate prices in Nairobi could take between three and five years.

One “hotspot” is the demand for logistics space, an “intriguing” asset class in which Fedha may consider making investments.

Bottom line

Business leaders are worried about the impact of the new digital services tax and are calling for a rethink  that would help Kenya’s attractiveness as a digital hub.

Source: theafricareport
Via: norvanreports
Tags: COVID-19 pandemicdigital contentKenyan economyKenyan real-estate company FedhaKPMGnew digital services tax
No Result
View All Result

Highlights

Chamber of Agribusiness Calls for Sector-Wide Price Cuts and Urgent Government Support to Curb Food Crisis

The Perils of Market Interventionism: When Political Pressures Threatens Ghana’s Economic Gains – The Way Forward

GAB Projects Drop in Lending Rates Starting August 6 Following BoG’s 300bps Policy Rate Cut

Local Bourse Rallies Strongly as GSE-CI Hits Near 7,000 Mark

Treasury Exceeds Auction Target of GHS 3.86 Billion Amid Tightening Yields

BoG Raises GHS 15.38 Billion via 56-Day Bills to Reinforce Tight Monetary Policy Stance

Trending

Agribusiness

Gov’t Increases Producer Price of Cocoa to GHS 51,660 per Tonne for 2025/2026 Season

August 4, 2025

Gov’t Increases Producer Price of Cocoa to GHS 51,660 per Tonne for 2025/2026 Season The Government of...

Value of Mobile Money Transactions Hit GHS 323.2bn in June

August 4, 2025

Alex Mould Questions BoG’s 25% Policy Rate Amid Ample Market Liquidity and Falling Inflation

August 4, 2025

Chamber of Agribusiness Calls for Sector-Wide Price Cuts and Urgent Government Support to Curb Food Crisis

August 4, 2025

The Perils of Market Interventionism: When Political Pressures Threatens Ghana’s Economic Gains – The Way Forward

August 4, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.