Renson Mwakandana
Tanzania’s finance minister announced that a digital tax will be implemented this year, aimed at global internet companies that provide services in the country.
The 2% tax will take effect in July, and it follows other governments’ initiatives to compel US multinational tech companies to pay at least a percentage of their revenues in local taxes.
Mwigulu Nchemba, Tanzania’s Minister of Finance and Planning, revealed the policy on Tuesday as he presented the country’s budget.
Mr. Nchemba told MPs, “The Tanzania Revenue Authority will design a simpler registration process to accommodate digital economy operators who have no presence in Tanzania.”
“This policy is designed to keep up with the digital economy’s rapid growth,” he continued.
Tanzania’s parliament, which will vote on the budget before July, must approve the tax.
The tax announcement comes after a meeting between Tanzania Revenue Authority officials and Meta, the parent company of Facebook, Instagram, and WhatsApp, in April.
Under the jurisdiction of the Organization for Economic Cooperation and Development, close to 140 countries agreed to a global minimum corporate tax of 15% last October (OECD).
More countries, including Turkey and India, have since signed on to the agreement, which is set to go into effect in 2023.
The historic agreement aims to put a stop to corporations hiding profits in tax havens.
