Business Edge | Tanzania to Introduce Digital Services Tax

As the month of April enters its final week, Tanzanians are bracing for the introduction of a digital tax mainly aimed at tech companies that operate in the country. The Tanzania Revenue Authority met with executives of Meta, the company that owns Facebook, Instagram and Whatsapp as part of the government’s consultations on the digital services tax.  In 2021, it was suggested that digital tech companies such as Facebook, Twitter, and Apple among others be levied as they do not remit anything to the country’s purse, while Tanzania insists doing so will have no impact on citizens and consumers. The situation is similar to Kenya’s where tax authorities there have moved to increase the digital tax there in order to boost the country’s earnings. On the Monday edition of Business Edge, Lekan Onabanjo discusses with Aly Khan Satchu, African geo-economist, macro analyst and CEO of Rich Management based in Nairobi. Together, they examine the pros and cons of the proposed digital tax in Tanzania.

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Although Tanzania is yet to declare the start date for the digital tax, it is clear that it is only a matter of time before it kicks off. “Clearly, [the subject] is on the radar, in a matter of fewer than twelve months,” Aly Khan Satchu says, explaining that it is part of the new government of Samia Suluhu Hassan’s approach to involving all stakeholders in matters of policy. “I expect the [bill} to push through in twelve months, probably less than six,” he added.

Furthermore, the Hassan presidency has shown that it is willing to engage and argue the merits of the policy before going on to implement it- unlike it did in 2021 when it introduced the widely unpopular mobile money tax last August. “When one considers] things like the mobile money tax which was increased last year, which was a poor decision and poorly implemented, what is being seen now is a more open government, open to discussion and seeking to carry everyone along.”

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Watch the full episode of Business Edge above.

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