Tanzania readies to tax Facebook, Instagram and WhatsApp

Thursday April 21 2022
TRA Meta

TRA official meet with Meta officials on Thursday April 21. PHOTO | COURTESY

By The Citizen Reporter

Dar es Salaam. Tanzania Revenue Authority (TRA) on Thursday held talks with officials from US social media giants Meta Platforms Inc as part of the government plans to introduce digital services tax targeting big technology companies.

Meta is the parent company to Facebook, Instagram and WhatsApp services which are popular in Tanzania, with millions of users.

“A team of experts from Meta, a company that owns Facebook, Instagram and WhatsApp, today held talks with TRA on how to tax their services in the country,” the Taxman posted on Twitter.

Clarifying the post, TRA director of taxpayer services and education Mr Richard Kayombo said the discussions were just preliminary on how the government can tax their services in Tanzania.

“Basically, these officials came forward to share how they do it in other countries where they already pay taxes,” said Mr Kayombo.

“So, after sharing, we will now look at our legal framework and see how best we can tax these companies,” he added.

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Tech giants such as Amazon, Google and Facebook make money locally but they pay taxes abroad.

African user countries no longer want to miss out on the revenue and are discussing digital taxes from tech giants which make billions in profits.

Last year, Tanzanian government hinted on taxing the tech giants like Google, Facebook, Instagram, Twitter, Apple and all other social media services which make a lot of money in the country, yet they do not pay taxes.

The Minister for Finance and Planning Dr Mwigulu Nchemba was quoted as saying that the impeding taxes to the foreign social media companies would not affect consumers in anyway.

He then clarified that the state was yet to figure out a way out on how to roll out the plan.

“We are looking for a way to tax, just like other countries do,” he said, adding that international companies get money from “our people and do not pay taxes.”

While at it, Dr Mwigulu also said that the government plans to introduce Digital Service Tax targeting people and companies that earn a living through the digital space but do not pay taxes.

Tanzania is not the first country in East Africa to contemplate charging big tech. In January 2021, Kenya introduced digital service tax at 1.5 percent on income generated through digital transactions. Other countries in Africa include Nigeria and South Africa.