Digital giants operating in Tanzania may have to start paying a 2% tax by July this year.
Tanzania’s finance and planning minister, Mwigulu Nchemba, made the proposed tax official on Tuesday during the annual budget presentation to parliament.
The proposal is however waiting for parliament approval before implementation.
“The Tanzania Revenue Authority will establish a simplified registration process for digital economy operators who do not have a presence in Tanzania,” said Nchemba.
“This is to keep pace with the rapid growth of the digital economy,” he added.
The announcement follows discussions in April between the Tanzania Revenue Authority and the US giant Meta, the parent company of Facebook, Instagram, and WhatsApp.
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Many countries have introduced such taxes, believing that digital giants making profits in their countries should also pay taxes there.
At the beginning of October, 136 countries agreed on a framework tax agreement under the auspices of the Organisation for Economic Cooperation and Development (OECD).
The agreement provides for taxation in each country of operation of a minimum portion of the income earned by US digital giants, as well as a minimum global tax rate to avoid tax optimization.