- Africa’s digital economy is rapidly expanding, driven by demand for streaming services, digital content, and mobile games.
- Foreign businesses need local guidance and technological support to navigate value-added tax compliance.
- By the end of 2025, 40 percent of the African population is expected to shop online, up from 13 percent in 2017.
- Gaming revenue in Africa grew about 8 percent in 2023, outpacing growth in Europe and North America.
- African tax authorities aim to capture value from foreign firms selling to local consumers.
- South Africa was the first African country to tax electronic services in 2014.
- Over 20 African countries now require nonresident providers to collect VAT on digital sales.
- VAT is a significant revenue source, making up 28 percent of total tax revenues in 31 African jurisdictions in 2020.
- Some countries, like Ghana, impose additional levies beyond VAT.
- Several nations have introduced digital services taxes or significant economic presence rules for foreign sellers.
- The goal is to tax digital consumption where it occurs, but systems vary on key points.
- New VAT rules in Zambia, Morocco, Ethiopia, and Burkina Faso highlight diverse regulations.
- Senegal and Zambia focus on services delivered through digital networks, while Ethiopia and Burkina Faso have broader definitions.
Source: news.bloombergtax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
