Do not tax social media platforms

In february 2019, The Guardian reported that millions of Ugandans were abandoning social media after punishing taxes were imposed on the use of networking sites and on money transactions using mobile phones in a daily levy, introduced to tame idle talk online and raise revenue. In Kenya, similar talks have since taken shape on whether or not to tax these platforms.

During the Pwani Innovation Week 2019 held at the Swahilipot Hub, that was attended by Honorable Joe Mucheru, the CS Ministry of ICT, in representation of the Government, Dr. Bitange Ndemo – the Chairman Blockchain TaskForce – gave a challenge for the consideration of other avenues for revenue generation instead of taxing social media platforms.

“Taxation on social media undermines democracy,” Ndemo said, adding; “I know our neighbor Uganda implemented a policy to tax social media but I hope Kenya does not borrow a leaf.”

Ndemo, who was speaking on digitization and the importance of digital economy, noted that the future of work is digital and only digitizing the economy would ensure for the creation of jobs for the future generations. He also input that digital taxation would be inevitable once the economy is fully digitized.

Kenya, as he avered,  would seamlessly digitize fully owing the mobile money uptake and internet penetration and/smartphone penetration that now stands at 60% of the entire population.

In justification of his non-taxation on social media platforms idea, Ndemo appreciated that the government could make more money by digitizing its entire functionality than it could from taxing the apps.

“Banks Made Ksh 9B from 800M in one year just from digitizing the backend- a single functionality,” Ndema said. Adding; “How much would the government make if its entire processes were automated?”

Ndemo passed a message to the youth, who as was revealed during the forum, join the workforce annually at around 1M in numbers. He said that digitization would be disastrous to those who are not innovative as their jobs would be taken.

In the spirit of the Pwani Innovation Week 2019 which is to encourage innovation for communities around the coast, Ndemo urged industry players to facilitate innovation among the youth by ensuring that apart from internet access, they get access  to useful content and use the content constructively.

The Pwani Innovation week is an annual forum in its second year running, that has been enabled by Swahilipot Hub and their sponsors together with the Cabinet Secretary Ministry of ICT, Hon Joe Mucheru, who was mentioned to have given the most fundamental support in growing the hub for what it is today.