Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries
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 ec...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2022-09-01
|
| Series: | Economies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-7099/10/9/219 |
| _version_ | 1797489221538152448 |
|---|---|
| author | Favourate Y. Mpofu |
| author_facet | Favourate Y. Mpofu |
| author_sort | Favourate Y. Mpofu |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-03-10T00:14:22Z |
| format | Article |
| id | doaj.art-c1a82684deda4d88949069c3a3ce2669 |
| institution | Directory Open Access Journal |
| issn | 2227-7099 |
| language | English |
| last_indexed | 2024-03-10T00:14:22Z |
| publishDate | 2022-09-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj.art-c1a82684deda4d88949069c3a3ce26692023-11-23T15:55:04ZengMDPI AGEconomies2227-70992022-09-0110921910.3390/economies10090219Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African CountriesFavourate Y. Mpofu0School of Accounting, University of Johannesburg, Auckland Park, P.O. Box 524, Johannesburg 2006, South AfricaDigitalization 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.https://www.mdpi.com/2227-7099/10/9/219digital economydigital taxesAfricaneconomic growthchallenges |
| spellingShingle | Favourate Y. Mpofu Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries Economies digital economy digital taxes African economic growth challenges |
| title | Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries |
| title_full | Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries |
| title_fullStr | Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries |
| title_full_unstemmed | Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries |
| title_short | Taxation of the Digital Economy and Direct Digital Service Taxes: Opportunities, Challenges, and Implications for African Countries |
| title_sort | taxation of the digital economy and direct digital service taxes opportunities challenges and implications for african countries |
| topic | digital economy digital taxes African economic growth challenges |
| url | https://www.mdpi.com/2227-7099/10/9/219 |
| work_keys_str_mv | AT favourateympofu taxationofthedigitaleconomyanddirectdigitalservicetaxesopportunitieschallengesandimplicationsforafricancountries |