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· Rwanda may very soon impose tax on companies like Netflix, which streams digital entertainment to viewers in line with the practise followed by western countries.
Rwanda proposes to tax online services including on the viewers of virtual streaming in the country. As reported by www.trendsnafrica.com earlier, countries like Zimbabwe and Nigeria have plans for the collection of taxes from e-commerce and digital companies such as Netflix, Google, YouTube, and Amazon., The proposal, according to the Rwanda Revenue Authority (RRA), has been presented before the Ministry of Finance and Economic Planning. There will be several layers of consultations before the implementation if approved.
A number of African countries have expanded the scope of their indirect taxes to cover digital services. Yet, only a few have so far implemented some form of direct digital services tax. Levying indirect tax on the country consuming services of a foreign company can bring substantial revenue to the exchequer. The argument put forward by the African tax authorities is that the services of a foreign company, say Amazon, pays tax in France, while operating in a foreign land. If European companies are collecting taxes from foreign digital platforms operating in their respective countries, the same rule can be applied to African countries as well.
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European countries are collecting VAT on services provided by foreign platforms. E-levy is something, which has been incessantly objected by companies operating in the continent. There is heavy lobbying against imposition of such taxes. Yet, some countries have either introduced e-levy or are planning to do so in the near future. For instance, South Africa has already taxes cryptocurrency and is planning to extend the taxes to digital streaming companies like Netflix.
