A new digital tax introduced in December 2024 is reportedly pushing traders away from formal e-commerce platforms, potentially hindering revenue growth. This comes despite a report highlighting the increasing importance of rural areas in e-commerce.”

• The Tax Laws (Amendment) Act 2024 mandates e-commerce operators to deduct 5 per cent from payments to resident sellers, on top of existing taxes.
• Jumia, an e-commerce firm, released a report indicating rural areas now account for 60 per cent of its orders, up from 54 per cent.
• Communications Authority of Kenya (CA) data shows a shift, with WhatsApp used for 20.2 per cent of order placements, suggesting a move towards informal channels.