Brief

ICTD Research in Brief;84

Are Digital and Traditional Financial Services Taxed the Same? A Comprehensive Assessment of Tax Policies in Nine African Countries

Published on 24 April 2023

This background report looks at tax implications for those providing and using digital financial services (DFS), and gives general observations as to whether DFS in Africa are taxed the same as traditional financial services (TFS). There is no categorical answer to this question. It varies country by country, depending on the specific arrangements in their legal and tax framework. Therefore, a country-specific approach is necessary.

This report analyses key legislative, tax and regulatory policy instruments to compare the tax framework in nine African countries – Burundi, Côte d’Ivoire, Ghana, Kenya, Rwanda, South Sudan, Tanzania, Uganda and Zimbabwe. The country studies illustrate the diverse experience across the nine African economies, and the tension between the need for greater mobilisation of domestic resources and the desire to see rapid roll-out of digital infrastructure and services.

The cross-country assessment highlights areas where the tax situation is different for DFS providers and users, compared to traditional financial institutions and actors. We present a number of preliminary considerations and lessons learned. These can help to shape an optimal tax environment, reduce friction, enhance beneficial competition in the financial services market, and minimise any negative consequences for DFS providers and users that arise within the taxation framework in all countries studied.

Cite this publication

Niesten, H. (2023) Are Digital and Traditional Financial Services Taxed the Same? A Comprehensive Assessment of Tax Policies in Nine African Countries, ICTD Research in Brief 84, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2023.015

Authors

Hannelore Niesten

Publication details

published by
Institute of Development Studies
authors
Niesten, Hannelore
doi
10.19088/ICTD.2023.015
language
English

Share

About this publication

Region
Africa

Related content