The Tanzania government has introduced a digital tax targeting global internet giants offering services in the East African nation.
According to the country’s finance minister, a two per cent tax will come into effect next month (July).
The decision follows similar attempts by other countries to force US tech entities to pay a portion of their revenues in local tax.
Mwigulu Nchemba, Tanzania’s Minister of Finance and Planning, disclosed the measure to the National Assembly as he presented the nation’s annual budget.
“Tanzania Revenue Authority will establish a simplified registration process to accommodate digital economy operators who have no presence in Tanzania. This measure is meant to keep pace with rapid growth in the digital economy,” Nchemba said.
The tax must be approved by Tanzania’s parliament, which will vote on the budget before the end of July.
The announcement follows talks in April between the Tanzania Revenue Authority and US social media giant Meta officials.
Meta is the parent company of Facebook, WhatsApp and Instagram.
Over 140 countries signed up for a 15 per cent global minimum corporate tax last October under the Organization for Economic Co-operation and Development (OECD) sponsorship.
Since then, more countries, including Turkey and India, have signed up for the deal, which is expected to come into effect in 2023.
The agreement aims to end corporations sheltering profits in low-tax haven countries.