African Tax Agencies Chase Collections In Digital Economy
Pauline Dikuelo | Monday March 11, 2019 12:05
The digital economy comprises commercial entities that operate in cyberspace, unimpeded by national borders, such as major social media giants including Facebook, Google and Twitter as well as entities such as Uber.
Some Bernadette, a representative from the Burkina Faso Revenue Service made the encouragement at the just ended Media Engagement and Training Seminar organised by the African Tax Administration Forum (ATAF). The seminar attracted 60 journalists from over 38 African countries. Revenue authorities from across Africa were also part of the three-day event held here recently.
During the seminar, the general consensus amongst African countries was that a large amount of tax revenue was being lost by many nations in Africa as they lack the capacity and instruments to collect tax within the digital economy.
Of great concern was that majority of multinational companies operating within the digital economy are said to be paying tax where they are incorporated (particularly in developed nations) and not in Africa where a fast-rising number of their clients are located. This denies the continent the much-needed revenue.
“We have to strongly analyse the digital economy and come up with a strong tax regime. Some of these multinationals are not paying tax because they have identified huge gaps in our tax legislation.
There is urgent need to come up with strong tax reforms to address the anomaly,” she said.
She also emphasised that there is need for African governments to establish offices or departments solely devoted to coming up with policies meant to promote and inculcate a culture of paying tax among those who operate in the digital economy.
“If we are to speed up collection of tax in the digital economy we need to establish departments manned by people with the analytical capacity and ability to come up as well implement the tax reforms that will ensure sound collection of taxes from the digital economy, ” she noted.
ATAF resources mobilisation manager, Thulani Shongwe, who was a presenter in the panel discussion which discussed Africa’s readiness to tax the digital economy, strongly concurred with Bernadette.
“The digital economy should be legislated and supervised if Africa is to benefit from it through collection of taxes. We should leverage on advent growth of various technologies to collect tax revenues for our nations as well as for supervision purposes which will combat non-compliance from the digital economy,” he said.
Participants at the three-day event noted that large multinational tech businesses operate within complex organisational structures and thus it was difficult for tax authorities in Africa to effectively check and ascertain their taxes.
Business reporters were urged to play a leading role in making sure that Africa catches up with other continents when it comes to the collection of tax from the digital economy.
“There is need for the media to research more on the subject and set the agenda on how African governments can come up with very strong reforms that will ensure that the continent collects tax from the digital economy,” said Swazi Times Business editor, Kwanele Dlhadhla who was one of the panelists in the discussion and answer session. ATAF, through its various initiatives, is tasked with helping African governments come up with strong tax regimes to ensure efficiency in tax collection.