East African nations pledge to jointly address taxation of digital firms

By Julie Martin, MNE Tax

Tax officials from Kenya, Uganda, Tanzania, Rwanda, South Sudan, Burundi, and the Zanzibar region of Tanzania, on November 11, announced that they have agreed to develop a joint strategy to more appropriately tax digital firms.

“We have agreed to develop a joint strategy for the East African Revenue Authorities to address the taxation of the digital economy by addressing issues to do with the legal framework in terms of definitions, identification of players and the legal mechanisms,” the officials reported in a communique following the 48th East African Revenue Authorities meeting.

OECD-led negotiations are now underway for a global deal on revised rules for taxing multinational groups that provide digital services. The aim is to reach a global agreement by mid-2021. It is likely that the East African nations aim to develop a joint strategy for those negotiations.

The meeting, held virtually, focused on common challenges facing tax administrations in the region.

The revenue officers decided that the East African Community Secretariat should devise an agreed framework on how to tackle base erosion and profit shifting and illicit financial flows in East Africa.

The tax officials also decided to continue using alternative dispute resolution mechanisms to unlock revenue and to enhance the use of technology and data analytics to assist with tax compliance.

• Bio
• Twitter
• Latest Posts
• Contact

Julie Martin

Founder & Editor at MNE Tax

Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.

Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.

Julie can be reached at [email protected].

@mnetax

Latest posts by Julie Martin (see all)

• UN committee considers updates to model tax treaty, developing nation tax guidance - April 21, 2021
• UN Committee of Experts approves new digital tax article for model treaty - April 20, 2021
• Leaked copy of US proposal for Pillar One and Two multinational group tax reforms available - April 12, 2021
• US offers new “Pillar One” compromise plan for taxing large multinationals - April 8, 2021
• UN tax committee releases updated model treaty language on automated digital services - April 7, 2021

Julie can be reached at [email protected].