Thu. Dec 12th, 2019

Should Netflix be taxed in Zambia?

By Dickson Jere

Two days ago I appeared on BBC TV debating this very question – should tech gains such as Netflix, Facebook, Google, Snapchat and Twitter be taxed in Africa? Those of you who watched my video clip know that I take the view that these tech companies should be taxed to the extent of the revenue they collect in African countries. But this debate is not only about Africa.

The European Union (EU) is seriously considering taxing these tech giants. In fact, at the last G7 summit in July this year, finance ministers agreed that these tech firms like Netflix should be taxed in jurisdiction where they make money even when they are not physically present there. France in July this year passed a law in which these internet-based companies domiciled in the US but offering services in France will be made to pay taxes in France. The new law is called GAFA, which is short for Google, Apple, Facebook and Amazon! Offcourse the US Government is fuming over these proposals – and rightly so as it will also affect her tax revenues.

I, therefore, do not see any reason why Zambia and other African countries should not be thinking along those lines. We need to start thinking outside the box in dealing with the emerging global tech economy. Issues of double-taxation will arise but that can only lead to African countries entering into double-taxation treaties with the US. By the way, so many jurisdictions are coming up with laws to tax these companies! We find to benefit from the global tech economy!

Why tax these tech firms outside the US? The rationale is simple. These digital firms contributes-millions of dollars to the US tax revenue but yet the US account for less than half of these companies revenue. In other ways, they generate income from countries in Africa, Asia and Europe where they do not pay taxes.

I find the debate between opposition leader Hakainde Hichilema and Information Minister Dora Siliya on this subject very refreshing . We need to have such kind of intellectual discourse on matters like this than usual politics and insults. I for one support the taxing of these companies like France has just done!

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