Organised by The African Tax Administration Forum (ATAF), a platform to promote and facilitate mutual cooperation among African Tax Administrations with the aim of improving the efficacy of their tax legislation and administrations.

ATAF HIGH-LEVEL TAX POLICY DIALOGUE: ENSURING AFRICA’S VOICE IN THE DEBATE ON TAXING THE DIGITAL ECONOMY

The African Tax Administration Forum (ATAF), together with the Zimbabwe Revenue Authority (RRA), and supported by the African Development Bank (AfDB) is organising a high-level dialogue on the nexus between tax policy and tax administration to discuss the tax policy and administration considerations of taxation of the digital economy and new emerging frontiers. Following a successful mandate renewal by the membership of ATAF in last year’s annual event, this year, ATAF will be prioritising an African response to the taxation of the digital economy.

Many African countries have reported concerns about the tax challenges they face as their economies become increasingly digitalised. Digitalisation enables multinational enterprises (MNEs) to carry out business in African countries with no or very limited physical presence. This makes it difficult for African countries to establish taxing rights over the profits the MNE is making from the business activities it carried out. In the era of a globalised economy, Africa is also providing convenience to its citizens through e-commerce. Global digital-based communications cut across territorial borders and create a realm of human activity that challenges the feasibility and legitimacy of laws based on geographic boundaries.

This especially pertains to transactions that are conducted electronically (e-commerce) over the internet, which ignore international boundaries since “place” has little meaning in the networked world. E-commerce changes the distribution of taxable activities; it poses challenges to the jurisdiction to tax income and alters the balance of taxing authority, and results in the erosion of countries’ tax bases. E-commerce creates difficulties in the identification and location of taxpayers, and the identification and verification of taxable transactions. Not forgetting to mention, the ability to establish a link between taxpayers and their taxable transactions.

These difficulties create opportunities for tax avoidance. This is especially so with the development of various electronic payment methods such as Bitcoin. The challenges arising from digitalisation affect both direct and indirect taxes. On the direct tax aspect, the discussion is whether the current international tax rules sufficiently address the problems created by digital business such as social media, marketplace and search engine platforms. In terms of indirect taxes, the consumption of services can take place in various parts of the world creating a problem on where to tax consumption.

More information : https://ataftaxevents.org/index.php?page=event-details&event_id=19