Tanzania joins a growing number of African countries imposing digital tax on big global tech firms
Tanzania’s Minister of Finance and Planning, Mwigulu Nchemba, announced earlier this week that all is set to begin imposing a 2% digital tax on global tech giants offering services in the East African country.
According to local media reports, the taxation will take effect from next month, following anticipated approval from the Tanzanian parliament. Business Insider Africa understands that lawmakers are scheduled to vote on the matter any moment from now.
“Tanzania Revenue Authority shall establish a simplified registration process to accommodate digital economy operators who have no presence in Tanzania. This measure is intended to keep pace with rapid growth in the digital economy,” the Finance Minister was quoted to have said.
Tanzania joins a growing list of African countries that have so far introduced various forms of digital taxation aimed specifically at big global tech companies that make money across Africa. Just last week, a Nigerian regulatory agency announced a code of conduct that would, among other things, require such companies to pay taxes.
Recall that late last year, about 130 countries reached an agreement to address the global tax challenges that have risen, following the digitisation of the global economy. Championed by the Organisation for Economic Co-operation and Development (OECD), the agreement aims to, among other things, reform the global tax rules in such a way that gives countries more right to impose taxes on multinational digital corporations like Facebook and Google.
An earlier article by Business Insider Africa detailed some of the ways this was a wonderful development for African countries. The Africa Tax Lead at Ernst & Young, Larry Eyinla, even noted that “this is actually a fundamental step in the right direction.”
