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Digital service tax guarantee more revenues-Legislator

Digital service tax guarantee more revenues-Legislator

A LAWMAKER has allayed fears over Digital Service Tax, saying it will guarantee the government more revenues.

The Member of Parliament for Special Seats (CCM) through Tanzania Mainland Civil Society Organizations (NGOs), Neema Lugangira said digital economy had high prospects of presenting the government a new tax base.

Ms Lugangira, who was speaking on the sidelines of the 5th Tanzania Annual Information and Communications Technology (ICT) Conference which kicked off here yesterday, said the world was fast embracing Digital Service Tax and that Tanzania should consider doing the same.

“This is where most governments get tax from for the sector to thrive,” offered the legislator.

According to the policymaker, renowned multinational technology company specializing in e-commerce, retail, Internet, and technology such as Amazon, Uber, Alibaba and Google had already joined the services.

“We are talking about the existing revenues that are generated by the multinationals, thus the country stands to reap big from such an taxes,” she insisted.

She described digital service tax as a ‘low hanging fruit’ which has since been embraced by other African countries like Kenya, Nigeria, South Africa and Tunisia. The MP further underscored the importance of digital economy, urging the government to put in place a digital economy policy or blueprint.

Earlier, the Director of Policy, Research, Advocacy and Lobbying at the Tanzania Private Sector Foundation (TPSF) Andrew Mahiga noted with concern how the ICT sector was overly taxed. He said the reality was tantamount to hindering innovation and economic growth in the country.

According to Mr Mahiga, 34 per cent of reveneus accrued from ICT goes into tax, with 18 per cent alone going into mobile tax.

“Let’s have a long term effect in focus when we are creating such laws and provisions,” he warned.

He further called for a legal and regulatory environment that allows new ideas and products to have a test of the new environment. Mahiga equally rooted for the enhancement of internet connectivity in the country and the narrowing of the skills gap in ICT.

In his rejoinder, ICT Director at the Ministry of Communications and Information Technology Mulembwa Munaku assured the lawmaker that his office would liaise with the Finance docket in considering Digital Service Tax.

Giving an overview on ICT Investment Perspective, Mr Munaku said Tanzania was willing to embrace new technologies.

“We will also explore on how best we could utilize the given available opportunities in the EAC and SADC and leverage on them,” he added. The four-day meeting brings together ICT experts from both, the public and the private sector.

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