THE United Nations on has urged African countries to reform their fiscal laws in order to enhance their tax revenues from the digital economy.
Uzumma Marilyn Erume, economic affairs officer, United Nations Economic Commission for Africa told journalists in Nairobi early this week that the digital sector in Africa is growing by approximately 40 percent annually.
‘African countries need to review their tax policies to ensure that governments capture their rightful share from the digital economy,’ Erume said on the sidelines of the seventh pan Africa conference on illicit financial flows and taxation on Tuesday.
The three-day annual gathering brought together policymakers, academia, civil society from Africa to review efforts to curb illicit financial flows and enhance domestic resource mobilization in the continent.
Erume said that Africa has one of the lowest tax revenue to gross domestic product (GDP) rates in the world.
She called for the continent to explore areas where it can expand the tax net without necessary affecting macroeconomic stability.
Erume said that even developed countries are also grappling on how to tax the digital companies including those in the social media space.
According to the UN official, taxation of some technology companies poses a challenge because they operate in countries where they do not have a physical presence.