Tanzania could soon require big tech companies to pay Digital taxes. The Tanzania Revenue Authority (TRA) on Thursday held talks with officials from Meta Inc. with the intention of introducing the tax. Meta is the parent company of Facebook, Instagram and WhatsApp.
“A team of experts from Meta, a company that owns Facebook, Instagram and WhatsApp, today held talks with TRA on how to tax their services in the country,” the Taxman posted on Twitter.
TRA’s Director of taxpayer services and education Mr. Richard Kayombo said the discussions were still at a preliminary stage before the East African country can lay down a framework for the tax.
“Basically, these officials came forward to share how they do it in other countries where they already pay taxes,” said Mr Kayombo.
“So, after sharing, we will now look at our legal framework and see how best we can tax these companies,” he added.
Last year, Tanzania indicated that big tech companies such as Google, Facebook, Instagram, Twitter and Apple were making a lot of money from their operations in the country and were not remitting taxes.
Globally, big tech companies are taxed in most of the countries where they operate, and Africa has started following on the same path. Kenya introduced and implemented digital tax on January 1 2022.
The digital tax set at 1.5 per cent of the gross transaction value is targeting revenues from technology firms and individuals who market or sell their products or services online.
The taxable digital content includes downloadable products such as mobile applications, movies and subscription-based media, e-books, journals, magazines, streaming of TV shows, streaming of music, podcasts, and online gaming.
Tanzania’s Minister for Finance and Planning Dr Mwigulu Nchemba indicated that the digital tax to big tech would hardly affect the consumers. However, that could be debatable given that in Kenya, big tech companies revised their prices upwards to accommodate the taxes.
“We are looking for a way to tax, just like other countries do,” he said, adding that international companies get money from “our people and do not pay taxes.”