Draft law to tax tech giants released

Botswana is an active member of ATAF, a group of African tax administrators, which intends to close any tax leakages and enhance tax corporation amongst member states.

The roadmap titled, ‘Suggested Approach to Drafting Digital Services Tax Legislation’ comes in the form of a pre-drafted legislation, which member states simply need to add their names in certain spaces and then enact the same as a new tax law. ATAF is concerned that companies such as Amazon, Alibaba, Google and Netflix, amongst others, derive revenue from Africa without paying a thebe in taxes, as they do not need offices wherever their clients are located.  ATAF proposes that a tax of between one percent and three percent of the annual revenue derived in member countries be subjected to a Digital Sales Tax. The tax is targeted at, amongst other revenue streams, online advertising, online gaming services and services delivered through online marketplaces. According to ATAF, other African countries such as Kenya and Nigeria have already enacted laws to collect the tax.