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Taxation of the Digital Economy Under Discussion

August 28, 2020

National Treasury

The Coronavirus pandemic has made the discussion on the taxation of the digital economy more urgent as countries are now embarking on economic recovery plans.

The deputy minister of finance, Dr David Masondo, emphasized this during the 4th African Tax Administration Forum (ATAF) High-level Tax Policy Dialogue hosted virtually.

The issue of taxing the digital economy was discussed at the ATAF.

In a statement, national treasury pointed out that the pandemic has also led to more digitalisation of economic activities that will likely escalate the loss of revenue in developing countries.

The deputy minister indicated that treasury and the South African Revenue Service advised parliament in June 2020 that “South Africa has opted not to introduce any unilateral measures to deal with direct tax treatment of the challenges of the digital economy for now”.

Rather, South Africa has opted to wait for “multilateral consensus or solutions to be published in the final report on tax challenges arising from digitalisation which is due in 2020”.