Tanzania will introduce a digital tax this year, the country’s finance minister said, in a move targeting global internet giants offering services in the East African nation. The two-percent tax will come into effect in July and follows similar attempts by other countries to force US multinational tech companies to pay at least a portion of their revenues in local tax.
Tanzania’s Minister for Finance and Planning, Mwigulu Nchemba, announced the measure on Tuesday as he presented the nation’s annual budget.
“Tanzania Revenue Authority shall establish a simplified registration process to accommodate digital economy operators who have no presence in Tanzania,” Nchemba told lawmakers.
“This measure is intended to keep pace with rapid growth in the digital economy,” he added.
The tax needs to be approved by Tanzania’s parliament, which will vote on the budget before July. The tax announcement follows talks in April between officials from the Tanzania Revenue Authority and US social media giant Meta — the parent company to Facebook, Instagram and WhatsApp.
Nearly 140 countries signed up to a 15-percent global minimum corporate tax last October under the auspices of the Organization for Economic Co-operation and Development (OECD). Since then more countries, including Turkey and India, have signed up to the deal, which is expected to come into effect in 2023.
The historic agreement aims to put an end to corporations sheltering profits in low-tax haven countries.