Work

Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries

Year: 2022

Type: article

Abstract: Digitalization has intensified globalization and economic interactivity between countries both developed and developing, increasing the complexity and lack of transparency in economic activities. The increase in digital transactions poses a remarkable challenge for tax authorities yet the digital economy is slowly replacing traditional commercialization and transactions. Conventional international tax legislation has not kept abreast with the growth and complexity of the digital economy and its accompanying challenges with respect to taxation. In view of the infant nature of digital tax legislation in African countries as well as the auspicious possibility of increasing tax revenue to fund public expenditure together with the probability of contradictory outcomes of digital tax policy, through a critical literature review this paper assesses digital taxation through direct digital service taxes (DSTs) in Africa. The findings were mixed. While the possibility of tax revenue maximization and improved economic growth were persuasive, the arguments pointing to negative externalities emanating from poor digital service tax policy design were equally pragmatic.

Source: Economies

DOI: 10.3390/economies10090219

Author: Favourate Y. Mpofu

Institution: University of Johannesburg

Language: English

Topic: Taxation and Legal Issues

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,466