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The study sets out the prospects and challenges of electronic commerce taxation in
Tanzania. It is based on three specific research questions: What are the requirements
and procedures in the taxation of electronic commerce in Tanzania? How effective is
the Tanzanian legal framework and the regulatory machineries on the taxation of
electronic commerce in Tanzania? What are the challenges experienced in electronic
taxation? There are new challenges that Tanzania taxation system must address, taxing
digital economy is one of such challenges. The existence of companies such as Jumia,
Google adverts, Facebook, Kikuu, Uber and all other digital companies that are active
in Tanzania economy has become inevitable and it is an undeniable fact that they are
commonly used in one way or another.
Perhaps Tanzania has not recorded a commensurate revenue performance from these
companies because the existing tax legal framework have not equally adopted to the
changing environment. In Tanzania, for one to be assessed for tax he must have
physical presence. This is a prerequisite that does not tally with the digital economies
because they mostly operate online and barely have physical footprint and yet register
huge sales.
The research incorporated a mixed methods design, incorporating both qualitative and
quantitative research approaches. The study involved a total study population of 75
respondents, out of the initially anticipated 80 respondents, drawing a response rate of
94%. The study has unveiled that the use of digital platforms is growing in
unprecedented pace while the taxation system is characterized with inefficiencies and
questionable policies on taxation of digital economy.
It worth noting that it is important to adopt the innovation through the use of
technology to strengthen the current legal and regulatory framework and develop
solutions to broaden tax bases. The adoption of the same will eliminate the current
inappropriate balance between the taxing right of residents and source countries and
ensure that the countries where digital business exists benefits in terms of tax. |
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