Deepening Scrutiny on Digital Finance Giants

NAIROBI, Kenya – The National Assembly's Departmental Committee on Finance and National Planning is set to investigate the operations of global payment firms Mastercard and Visa, following a formal request by Nandi Hills Member of Parliament, Bernard Kitur. The inquiry, initiated on Wednesday, November 5, 2025, demands that the two multinational corporations provide comprehensive details on their tax remittances and compliance with Kenya's data protection laws since commencing their operations in the country.

Mastercard established its East African regional headquarters in Nairobi in February 2012, while Visa is cited as having begun its Kenyan operations in 2016. Both companies are integral to Kenya's burgeoning digital economy, processing billions of shillings in transactions annually between consumers, merchants, and financial institutions. In his statement, MP Kitur emphasized the need for transparency and accountability, stating, “Noting that these systems are foreign-owned entities processing significant transaction volumes, there is a need to ensure transparency, accountability, and compliance with national financial and tax laws.”

Kenya's Regulatory Framework for Digital Services

The parliamentary inquiry comes amidst a broader push by the Kenyan government to enhance its regulatory oversight of the digital economy. A key piece of legislation is the Data Protection Act of 2019, which is substantially modeled on the European Union's General Data Protection Regulation (GDPR). This Act governs the processing of personal data for individuals within Kenya, imposing significant obligations on both local and international entities. The Office of the Data Protection Commissioner (ODPC) is tasked with its implementation and enforcement. The Act requires entities handling personal data to adhere to strict principles of privacy, security, and lawful processing. Furthermore, the transfer of personal data outside Kenya is restricted unless the recipient country has adequate data protection standards or the data subject has given explicit consent.

On the taxation front, Kenya has been actively developing its framework for taxing the digital economy. In January 2021, the government introduced a 1.5% Digital Service Tax (DST) targeting multinational tech firms. More recently, the Kenya Revenue Authority (KRA) has proposed the Income Tax (Significant Economic Presence) Regulations, 2025. This would replace the DST with a system that taxes 10% of a company's gross turnover in Kenya at the corporate income rate of 30%, effectively creating a 3% tax on gross turnover for non-resident firms with a significant economic presence. This is part of a global trend, aligning with the OECD's framework to ensure multinational corporations pay a minimum tax rate of 15% in the jurisdictions where they operate.

Key Demands of the Parliamentary Inquiry

The request tabled by MP Kitur seeks specific information from Mastercard and Visa, including:

• The total number of users and financial institutions integrated into their payment systems in Kenya.
• The total value of all transactions processed within the last three financial years.
• Detailed records of all taxes paid to the Kenyan government.
• Clarification on the mechanisms the Kenya Revenue Authority (KRA) uses to assess and collect taxes from their operations.

This inquiry aims to shed light on the financial contributions of these payment giants to the national exchequer and to ensure they are operating in full compliance with Kenyan law. The outcome of this parliamentary scrutiny could have far-reaching implications for the regulation of other multinational technology and financial service providers operating in Kenya and the wider East African region.

Broader Implications for Kenya's Digital Economy

The investigation into Mastercard and Visa's operations highlights the challenges and opportunities presented by the rapid growth of Kenya's digital financial services sector. The Central Bank of Kenya (CBK) is the primary regulator for payment systems and providers, with the National Payment System Act and the E-money Regulations forming key parts of the legal framework. The CBK's mandate is to ensure the safety, efficiency, and consumer protection within the national payment system. Recent legal battles, such as the KRA's unsuccessful attempt to levy a 16% VAT on payment switch firms, underscore the complexities of applying existing tax laws to new digital financial services. The Tax Appeals Tribunal's ruling that these services are financial and thus VAT-exempt, sets an important precedent. As Kenya continues to position itself as a leading technology hub in Africa, balancing the need for foreign investment with robust regulatory oversight and fair taxation will be crucial for sustainable economic development. The findings of the Departmental Committee on Finance and National Planning's investigation will be closely watched by stakeholders across the financial and technology sectors.