An alliance of US service industry groups has called on the Trump administration to push William Ruto’s government to abandon a raft of new and proposed taxes that it says place an excessive burden on foreign digital companies.
In a formal submission to Washington, the Coalition of Services Industries (CSI), whose membership includes Google, Microsoft and Amazon, argued that the measures unfairly target American firms and put their long term investments at risk.
The group said the mix of taxes creates what it described as a “prohibitive” structure with “overlapping” obligations that are difficult to navigate.
The document highlights legislative amendments passed in December 2024 that replaced Kenya’s 1.5 per cent Digital Service Tax with a Significant Economic Presence Tax (SEPT).
The new levy is charged at 3 per cent of the gross turnover generated in the country by non resident companies operating through digital platforms. Although the coalition welcomed the decision to remove the original DST, it warned that the SEPT had introduced its own complications.
According to the submission, the SEPT is only one part of a broader and more complex regime that foreign firms must now manage.
The lobby noted that “non resident providers must also contend with new obligations, including a 20 per cent withholding tax on digital marketplace payments and excise duty on services delivered through digital platforms, adding multiple layers of taxation that increase compliance costs and reduce profitability.”
The coalition stressed that the 20 per cent withholding tax applied to digital marketplace payments is particularly oppressive. One section of the document labels the rate “burdensome” and warns that companies will struggle to absorb the extra expense.
The SEPT is designed to target companies that have strong commercial activity inside a country even without physical operations. Critics within the CSI say that applying the 3 per cent charge to gross turnover, combined with the additional withholding and excise duties, places American technology firms at a competitive disadvantage.
The group has urged US officials to raise the matter directly with the Kenyan government, arguing that the current approach risks diminishing digital trade and slowing investment flows at a time when both economies stand to benefit from deeper technological cooperation.
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