A COMMENTARY ON AIRBNB AS A DIGITAL BUSINESS MODEL: REGULATION AND TAX CHALLENGES FOR EAST AFRICA

Abstract

This article sets out to discuss two key issues. The first relates to how digital business models can be leveraged for domestic resource mobilisation and the second issue, related to the first, discusses the interplay between digitalisation and tax avoidance. Airbnb and Booking.com are relied on as the case studies from whence these two issues are discussed. Arguably, despite the growth in online business models within East African states, such growth has not been commensurate with the revenue collected from online businesses. Given the increasing popularity of mobile apps among East African customers, online businesses have been able to increase their market share and directly collect income through their smart phone apps compatible with mobile money transfer. This article advances the view that those online businesses not only pose taxation challenges for the East African community but also reflags the need for more capacity building for East Africa’s revenue authorities.