Several tax authorities worldwide have recently enacted tax laws with the objective of taxing the digital economy. Tanzania has followed the trend by proposing to introduce Digital Services Tax. The budget speech by the Minister for Finance and Planning for 2022/2023 indicates that the VAT Act will also be amended without imposing obligation under the Income Tax Act.
Overview of the Digital Services Taxes
Digital Services Tax is proposed to be charged at 2% on the turnover of the non-resident digital services providers. The proposed tax shall be effective from 1 July, 2022. As per the Minister, the objective is to keep pace with rapid growth in the digital economy, increase government revenue and ensure equity.
The due date, the scope of digital services, and how to account for the tax have not yet been indicated. The Minister for Finance and Planning has stipulated that Tanzania Revenue Authority will establish a simplified registration process to accommodate digital economy operators with no presence in Tanzania.
How can Auditax International Support?
Auditax International’s tax experts can assist you to manage the tax risks associated with Digital Services Tax. Get back to us for the following services:
- A review of whether or not you qualify to account for Digital Services Tax
- Tax representative services: We can provide tax representative services to ensure compliance with Digital Service Tax requirements. These include filing returns, payments to TRA, and keeping records for the taxes.
Reach out to us through firstname.lastname@example.org