Digital Service Tax was introduced by the government to take effect from January 1st 2021. The Digital Service Tax is supposed to be paid by those who get their revenues mainly online like the influencers, those who use websites to sell their products in short the digital marketplace. The Digital Service Tax was included in the Value Added Tax and Income Tax. The said act gives the definition of digital marketplace as ‘a platform that enables the direct interaction between buyers and sellers of goods and services through electronic means. Pursuant to the act the following income are subject to digital service tax namely; downloadable digital content including downloadable mobile applications, e-books and films; over the top services like streaming television shows, films, music, podcasts and any form of digital content; sale of, licencing of, or any other form of monetizing data collected about Kenyan users; provision of digital marketplace; subscription-based media including news, magazines and journals; electronic data management including web hosting, online data warehousing, file sharing and cloud storage services; electronic booking or electronic ticketing; provision of search engines and automated help desk services online distance training through pre-recorded media or e-learning including online courses and training and any other service provided through a digital marketplace. Digital Service Tax return and tax payable shall be due by the 20th day of the month following the end of the month that the digital service was offered. The Digital Service Act is to be computed at 1.5 % of the gross transaction value of the digital service. Failure to submit the digital tax return by the due date one is liable for 5% of the tax due; Failure to pay Digital Service Tax by the due date one is liable to 5% of the unpaid tax and an interest charged at 1% per month or any part thereof on any unpaid tax. The major area of concern has to do with the effect of the Digital Service Tax to the Small Medium Enterprises in Kenya. Analysis of the same has it that the digital service tax will have a negative effect on the Small Medium Enterprises in the country. It is worthy to note that by Kenya effecting the digital service act it will kill the already established online businesses for the 1.5% levies to be paid will be relatively herculean to an already overtaxed entrepreneur by the counties and the national government. The number of customers who have been using the platforms as well will be greatly affected. Others are of the view that this price distortion is not confined to the e-commerce space but the entire digital services are liable. This will have a negative impact on the sustainable digital economy Kenya has been trying to build. With all these taxes being implemented, Kenya appears to be on a path of reversing all the gains that have been made when it comes to being a leading technology hub in Africa. These new taxes are presenting a new challenge to existing and new technology companies mostly known as start-ups. Majority of these start-ups fall under the Small and Medium (SMEs) sized categories. SMEs are the backbone of the country’s economy constituting about 98% of Kenya’s business sector and employ about 14.5 million Kenyans. SMEs in Kenya already pay several taxes including the 30% tax on profits for companies, , 3% turnover tax for any entity making above 500,000 shillings, they are required to charge VAT if the company has a turnover of above 5 million shillings annually and pay as you earn on behalf of their employees. With an already dire economic situation that had already started to show before the Covid-19 pandemic and has only gotten worse with the Covid-19 pandemic. Small and medium-sized companies in Kenya appear to be in turbulent waters. SMEs are front and centre when it comes to operating in the digital sphere. Even though the argument by the government is that these taxes target foreign digital entities that operate in Kenya, SMEs particularly those in the technology sphere appear to have been caught in this net. One thing is certain that the timing of the digital service tax by the government raises a serious concern to all and sundry. The SMEs are already heavily taxed and most of them are just recovering from the effects of the Covid 19 pandemic. Business is slowly coming back to life then the government introduces taxes that will hinder the growth of the SMEs and will lead to the decline of the SMEs for the taxes are punitive. Two things are certain in life: death and taxes. The former no one knows the time or place, but the latter can be predicted, and its eff

The outbreak of Covid 19 last year led to devastating effects of several businesses. This was courtesy of the various restrictions that were declared by the government. Some of the restrictions included lockdown in several areas; air travel was abhorred by several governments; loss of revenue since the various countries were at a standstill and movement of people was as well restricted by the government to mitigate the Covid 19 pandemic. Most of the companies resorted to laying off workers, others sent the workers on compulsory leave without pay and some had to close business for they were not getting clients. Moreover law firms that heavily depended on litigation as their area of expertise suffered for the courts were closed for a long period this means that their source of revenue was affected. With the closing of business those law firms which depended on commercial and corporate transactions suffered the same fate. Not forgetting those in the conveyancing area of speciality. In the long run as well courtesy of the pandemic the demand of clients as well reduced. As we transition to new ways of operation against the backdrop of a volatile global economic outlook, global businesses are implementing strategies to ensure they can continue to operate in a rapidly changing and increasingly uncertain legal and regulatory landscape. Operational resilience and a clear strategy will be essential for organizations not only to survive but to as well strive. While protecting public health still remains the priority, many organizations are facing challenges, including major disruptions to their supply chains, meeting contractual obligations, bringing people back to the workplace and implications under funding arrangements. Due to the changes that have taken place it behoves the law firms to change their strategy and adapt to the new way of operations for them to be sustainable. This calls for crisis management for the law firms. The following suggestions will help to make sure that the law firms remain sustainable post Covid 19.It is incumbent upon the managers of the law firms to keep focus on its personnel. Many law firms have recently undergone staffing changes and even salary reductions in order to make ends meet. It is integral that before making any personnel changes, consider any alternative strategy that would not result in layoffs for the dedicated employees are the reason that the business will make it through this global health crisis. The people working in the law firms should be treated as a valuable investment. This will in the long run help their morale and motivate them to work. Laying off may not be the best option because you can lay off one who had a pivotal role in the company and getting a replacement may be a tedious endeavour. Secondly, maintaining a full work force is very difficult in this time when most forms are seeing a decrease in potential clients and reduced demand from existing clients. To avoid laying off employees, you’ll need to find a financial cushion in the margins. One way to do this could be to pursue payment on your outstanding accounts receivable. You could have more funding available than you expected. You can also investigate possible lines of credit to bridge the gap until the economy returns to normal. Thirdly it is imperative for law firms to embrace technology by heavily investing in it for even right now most client meetings and court sessions take place online; this will aid you to support your clients in the transition to the new normal. As well, the law firms need to invest heavily in social media and other forms of digital marketing. Law firms as well can make use of remote working for this will reduce costs and as well this will be effective for those in departments that will need one not to go to the office. Being that as well paying rent is becoming difficult, remote working is the best resort. Other law firms have come up with virtual firms to aid in their day to day activities. Developing a diverse practice mix remains the best advice. This is because when one sector is affected by the pandemic heavily then the law firm will not be forced to shut its doors but operations will go on and revenue will continue coming in. This is the time to make your clients your priority. Your clients will remember how you treated them when the going got tough. They are feeling overwhelmed and they may be struggling financially during this time. Offering them compassion and understanding will go a long way to solidifying your working relationships. Take time to converse with them and understand.