The government will review the digital services tax on multinationals two years after it came to effect, in an effort to spur foreign investments.

To review the digital services tax and the local ownership policy, the has begun discussions with the National Assembly.

The DST is charged on gross transaction values of tech companies. Companies or individuals who are non-residents are obliged to pay it if they provide or facilitate provision of a service to a user who is located in Kenya.

ICT companies have been criticising the legislation since it took effect in 2021, claiming it is stunting the sector's expansion.

The Prime Cabinet Secretary Musalia Mudavadi urged the National Assembly to expedite the review of the Finance Act 2021.

“To encourage investors let us make the environment friendly then when they are here we can now eventually through the Nairobi Secutires Exchange allow Kenyans to be part of the business,” said Mudavadi.

He was speaking during the 12th Connected Summit in Kwale.

Last week President William Ruto told investors that the government is set to abolish the 15 percent minimum tax rate imposed on foreign ICT firms. It has been in existence for three years.

The President told the American Chamber of Commerce (AmCham) meeting that the act that came into force on July 1, 2021 has made Kenya uncompetitive leading to low investment in the sector.

According to Mudavadi, talks with the National Treasury, the Kenya Revenue Authority, and players in the ICT sector will also be a part of the process to repeal the law by July 2023.

Cabinet Secretary  for information Communication and the Digital Economy Eliud Owalo said they are working with the counties to review the way-leave levy charged by the devolved governments on companies laying broadband infrastructures.

The four-day summit has brought together more than 1,500 delegates from around the World to discuss emerging issues facing the ICT sector.