A recent study by the African Tax Administration Forum (ATAF) revealed that while e-commerce presents an economic opportunity for the continent, its Value-added tax (VAT) implications must be carefully appraised considering that the ability not to own inventory/assets or have physical nexus results in low or no visibility on e-commerce transactions by the tax administrations. Thus, VAT being a consumption tax charged on the supply of goods and services will be highly affected by the dynamics of e-commerce. The surge in imported digital services has led tax agencies to give greater attention to administering the VAT on imported services especially digital services. Additionally, as net importers or consumers of digital services, the implementation of an effective compliance regime presents African countries with an opportunity to improve revenue mobilization in a digitally evolving world.
Source Ataftax.org
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