Several tax authorities worldwide have recently enacted tax laws with the objective of taxing the digital economy. Tanzania has followed the trend by introducing Digital Services Tax.

Overview of the Digital Services Taxes

Digital Services Tax is charged at 2% of gross payment to a non-resident person who receives payment with a source in the United Republic of Tanzania from an individual. Digital Services Tax is effective from 1 July, 2022.  As per the Minister of Finance and Planning, the objective is to keep pace with rapid growth in the digital economy, increase government revenue and ensure equity.

Scope

Digital Services Tax applies to non-resident persons who receive a payment that has a source in the United Republic of Tanzania from an individual, other than a payment made in the course of conducting business, in respect of services rendered through a digital market place.

Due Date, Payments and Return Filing

Digital Services Tax is paid for payments received in a calendar month by way of single instalment equal to two percent of the gross payment (exclusive of VAT). A return should be filed to the Commissioner on or before the seventh day of the month following the month to which the payment relates. The Minister may issue regulations to prescribe procedures for assessing and collecting the tax.

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 the tax requirements. These include filing returns, payments to TRA, and keeping records for the taxes.

Reach out to us through info@auditaxinternational.co.tz