In recent years, the global tax landscape has undergone
significant transformation as governments seek to address
challenges posed by the digital economy and the evolving dynamics
of multinational enterprise (MNE) taxation.
Driven by initiatives like the OECD's Base Erosion and
Profit Shifting (BEPS) project, and the increasing adoption of a
global minimum tax (GMT) under Pillar Two of the OECD/G20 Inclusive
Framework, tax authorities across the world are reforming domestic
laws to secure taxation of multinational corporations and prevent
tax avoidance.
The 2024 Tax Laws (Amendment) Bill (the Bill) reflects this
trend, incorporating proposed provisions to ensure that MNEs pay
tax on income sourced from Kenya. Through measures such as the
Significant Economic Presence tax (SEPT) and the Minimum Top-Up Tax
(MTT), Kenya aligns itself with global efforts to tax digital
services and safeguard domestic revenue from tax base erosion.
