Multinational firms operating in Kenya could be forced to give more details on profits made in the country for taxation should global talks currently ongoing in New York be adopted.
The negotiations on the United Nations Framework Convention on International Tax Cooperation, aim to give member states a bigger say in revenues made by multinational companies.
The talks seek to shift taxing rights closer to economic activity and consumer location rather than where profits are booked.
This could grant Kenya greater powers to tax global companies having recently introduced several measures to tax the digital economy, including the Significant Economic Presence (SEP) Tax, which replaced the Digital Service Tax, alongside VAT on digital services supplied by foreign companies.
If adopted, the UN framework could strengthen Kenya’s ability to tax revenues generated by multinational digital firms such as Google, Meta, Amazon, Netflix and cloud computing providers whose services are widely used by Kenyan consumers and businesses.
Speaking during a media briefing ahead of the fifth session of the negotiations, Tax Justice Network Africa executive director Chenai Mukumba said the negotiations represent more than a technical discussion on taxation.
“For Kenya and other African countries, what’s at stake is not merely a reform of international tax rules, but an important step towards finally completing the journey from political independence to genuine economic sovereignty,” she said.
As the talks resume for the fifth session, the proposals are also expected to influence how countries tax multinational companies operating regional headquarters, mining projects and other cross-border businesses by shifting taxing rights to where value is created rather than where profits are reported.
The speakers also pointed out that the proposals could also reignite debate over Kenya’s generous investment incentives, including tax holidays offered in Special Economic Zones, Export Processing Zones, Konza Technopolis and to investors in strategic sectors such as manufacturing and data centres.
Another proposal under discussion would require multinational companies to publicly disclose, on a country-by-country basis, the revenues they earn, profits they declare, taxes they pay, number of employees and assets held in each market.
Supporters say the disclosures would make it easier for tax authorities to detect profit shifting and ensure companies pay taxes where they conduct business.
The negotiations could also trigger fresh debate over Kenya’s investment incentives, including tax holidays granted in Special Economic Zones, Export Processing Zones, Konza Technopolis and other strategic investment programmes.
Delegates at the briefing argued that such incentives should only be offered where they deliver measurable public benefits such as employment, local procurement, technology transfer and tax revenues.
Mukumba said the existing international tax system was created at a time when African countries had little influence over global rule-making, leaving many governments unable to fairly tax wealth generated from their natural resources, labour and growing consumer markets.
She argued that the new UN framework seeks to ensure countries where value is created receive a fairer share of tax revenues.
The negotiations, which began in 2025 and are expected to conclude in 2027, are being closely watched by governments seeking to increase domestic revenue without imposing additional taxes on households and small businesses.
