Emerging economies across Africa, including Kenya, are accelerating the adoption of electronic invoicing and digital tax technologies to tackle soaring debt-to-GDP ratios and the urgent need to broaden tax bases. With traditional borrowing becoming increasingly unsustainable, governments are turning to innovative solutions to strengthen revenue collection and modernize tax administration.
Digitax, a prominent player in this sector, is positioning itself as a thought leader in the digital tax transformation landscape. The company was founded in 2022 by Caine Wanjau and Thuku wa Thuku, who had accumulated vast expertise in other startups before venturing into this joint creation. Caine initially worked at Twiga Foods where he helped to upscale its tech team, while Thuku worked at SmileID.
Digitax was conceived as a solution intended to simplify and streamline the invoicing process to make it as straightforward as possible for both tax authorities and businesses. This approach addresses a critical problem: the complexity and inefficiency that have historically hindered effective tax compliance in many emerging markets.
In an interview with The Kenyan Wall Street, Wanjau and Thuku noted that there was a surge in customer demand for user-friendly platforms that simplify traditionally complex processes. A decade ago, generating a tax invoice involved cumbersome hardware and training, but today’s fintech-inspired solutions focus on handling financial information rather than direct transactions, aiming to meet stringent regulatory standards without engaging in money movement.
“Because tax invoicing is a regulatory requirement, that presupposes that you need to have a touch point with as many businesses as possible. Now, once you have that relationship with businesses, it’s then a question of what value-added services can you offer them?” said Caine Wanjau, CEO — Digitax.
The Digitax platform is highly adaptable, designed to work across diverse tax jurisdictions and scalable enough to serve both domestic businesses and large international companies. By enabling electronic invoicing, Digitax supports tax authorities in transitioning from paper-based, or device-dependent invoicing systems to more efficient, cloud-based digital frameworks.
A key insight driving Digitax’s strategy is the recognition that many countries suffer from high debt-to-GDP ratios. These nations can either continue borrowing unsustainably or grow their tax base through improved revenue collection mechanisms. Digitax believes that electronic invoicing is a crucial lever in enabling governments to expand their tax revenues and manage debt pressures more effectively.
By linking tax compliance to business operations such as requiring e-invoices to claim expenses and leveraging supply chain dynamics, the government is fostering a market-driven enforcement mechanism. This blend of automation and collaboration with startups like Digitax signals a shift toward more efficient, transparent tax administration that benefits both the government and the business community.
Digitax accounts for 80% of post-sale interactions and agile product iteration based on real user feedback. As electronic invoicing mandates expand across African markets, Digitax’s hybrid B2G and B2B model aims to bridge the gap between evolving tax policies.
The founders identified gaps in customer support from existing providers that have opened opportunities for newer entrants. For instance, one tax authority recently highlighted that the leading provider of tax invoicing devices in their market had poor customer responsiveness, sometimes taking up to two weeks to address client concerns.
Digitax aims to capitalize on such weaknesses by offering more responsive and customer-focused service, aiming to secure what they describe as leveraging the mistakes of earlier entrants to gain traction.
“Before VAT filing was more of a self-declaration process. But now with auto-population, KRA is actually now able to extract information on your purchases and combine that with your sales and then tell you what you’re actually supposed to pay at the end of the month,” Thuku wa Thuku, COO — Digitax, said.
The company’s vision extends beyond Africa. Digitax is actively exploring opportunities in other emerging markets and is keen to support large multinational corporations operating across multiple jurisdictions. This expansion is fueled by the growing global recognition of Africa’s pioneering role in tax digitization. International players are beginning to take note, with Digitax preparing to scale its offerings beyond the continent through strategic partnerships, investments, and consulting engagements.
“The larger enterprises that are inherently compliant because of the governance structures they have are forcing the SMEs to be compliant because they want to ensure that if we pay out a hundred million, for example, on a monthly basis to suppliers, we’re able to claim that as an expense,” Thuku said.
“From a product standpoint, we started out with an online portal, but we now offer various ways of interacting with digitax. Beyond Kenya and Zambia, we also have expansion plans led through some of our partners,” Wanjau said.
As the digital tax landscape evolves, Digitax stands out as an example of how agile, customer-centric firms can disrupt established players and help governments modernize fiscal systems. Their success could serve as a blueprint for how technology-driven tax reforms can enhance revenue collection, improve transparency, and ultimately strengthen economic resilience in emerging economies.
“Tax compliance is also about being proactive… businesses are insisting that they need an E-Teams invoice to process or give you a payment. You also want to make sure that you don’t get on the wrong side of the KRA or the tax regulator,” Caine Wanjau said.
With governments worldwide under mounting fiscal pressure, digital tax transformation is a necessary strategy for sustainable public finance. Companies like Digitax are at the forefront of this revolution, helping bridge the gap between policy ambitions and practical implementation.
