The refusal by global cab-hailing platforms to pay taxes locally citing international laws jurisdictions have led to huge revenue loss for Kenya Revenue Authority (KRA). The global cab-hailing platforms in Kenya like Uber, Little and Bolt have been resisting attempts by the Kenya Revenue Authority (KRA) to audit them. These companies cite privacy laws in the jurisdictions where they are registered to deny audit of the transactions that are undertaken in Kenya on their platforms. As an example KRA points out the case of Uber. Data on payments made to Uber’s partner drivers or to Uber BV becomes inaccessible for KRA, as they claim that it is subject to the privacy laws, such as the Dutch Privacy Act and the European Union’s General Data Protection Regulation in the case of Uber BV.
According to a statement from KRA, the government is losing taxes from the cab-hailing companies as well as the drivers using their platforms. These include withholding taxes from commissions to the companies to be remitted to KRA as well as income tax by drivers from fares that customers pay. In a recent submission to the Senate Committee on Labour and Social welfare KRA explained that enforcement has become a challenge since tax on commissions paid to non-residents is ‘’collected through the withholding tax regime, which requires partner drivers to withhold the tax as they pay commissions.”
Efforts are on by the Kenyan Government to regulate the taxi-hailing industry. The National Transport and Safety Authority has already proposed regulations to rope in the players into the tax bracket that requires them to have tax compliance certificates before being licensed as operators.
