With insights from Africa-focused tax advisers from Baker McKenzie and our network of African hub firms, we aim to provide you with regional updates and practical guidance on the tax implications of doing business across the large and diverse African continent.

In this edition of the Baker McKenzie Africa Tax Newsletter, we focus on the most recent legal and regulatory developments on the taxation of digital services in key African jurisdictions.

Digital services tax across Africa


The preamble to the Electronic Transactions Proclamation (ETP) states that the purpose of the law is to make electronic commerce widely available by transitioning the economy to the digital age and, through its regulatory framework, make the economy more inclusive to citizens, improve competition, create parity between paper and electronic transaction records, and enhance the administration of e-Government services. The ETP prescribes the establishment of a federal digital economy council under the Prime Minister’s Office, which will serve as an advisor to the various governmental agencies involved in the regulation of electronic commerce. The Ethiopian Communications Authority will serve as the registrar and regulator of .et domain name users. Read more here.

A copy of the proposed Electronic Transactions Proclamation can be viewed here (in Amharic).

For more information, contact Pomy Ketema of Baker McKenzie.

Ivory Cost

In the State Budget 2020, the Republic of Ivory Coast has proposed to introduce a tax on the broadcasting of videos on demand. The tax at the rate of 3 percent is based on the amount or price (excluding tax) paid by the customer in return for the delivery of cinematographic or audiovisual work by means of an electronic communication process. Read the Fiscal Annex to Law No. 2019-1080 of 18 December 2019 of the State Budget 2020 (in French) here.

For more information, contact Mamadou Coulibaly and Ibrahim Berthe of Satis Partners.


With the issuance of the Finance Act, 2019, the Government of Kenya amended the Income Tax Act by introducing Digital Service Tax (DST) on income accruing through a digital marketplace and proposed the introduction of DST at the rate of 1.5 percent of the gross transaction value via the Finance Bill, 2020. The Kenya Revenue Authority also published the draft Value Added Tax (Digital Marketplace Supply) Regulations, 2020, on 25 May 2020, providing a simplified VAT registration framework for non-resident entities who provide digital supplies in Kenya. Failure to collect and remit VAT will result in the denial of access to the digital marketplace. Read more here.

For more information, contact Kenneth Njuguna and Daniel Ngumy of Anjarwalla & Khanna LLP.


Under the VAT law, the development, sale or transfer of computer software is a taxable supply if made by a taxable person in Mauritius in the course or furtherance of his business. Although more generally, there is currently no definition of “digital services” under Mauritian law.

In the Budget Speech 2020-2021 presented on 4 June 2020, the Honourable Minister of Finance, Economic Planning and Development stated that digital and electronic services provided by non-residents for consumption in Mauritius will be subject to VAT, with the Value Added Tax Act, 1998, to be added in July 2020. View Annex A.5 to the Budget Speech here.

For more information, contact Fayaz Hajee Abdoula and Satyan Ramdoo of BLC Roberts & Associates.


On 13 January 2020, the Finance Act, 2020, was enacted into law, amending the Companies Income Tax (CIT) Act and Value Added Tax (VAT) act by bringing digital services within the purview of Nigerian CIT imposition, as well as for the applicability of VAT to digital transactions. Read more here.

Pursuant to the Finance Act, 2020, the Honourable Minister for Finance, Budget and National Planning has published the Companies Income Tax (Significant Economic Presence) Order 2020 (SEP Order), which provides a definition of SEP for the purpose of imposing CIT on income derived from Nigeria by non-resident companies from digital transactions and services. View the SEP Order published in the Official Gazette here.

For more information, contact Dipo Komolafe and Sesan Sulaiman of Templars.

South Africa

In his budget speech in February 2020 the South African Minister of Finance, Hon. Tito Mboweni, announced that the definition of telecommunication services per the regulations prescribing electronic services for the purposes of the South African VAT Act (Regulation No 429 of 18 March 2019, published in Government Gazette No 42316) would be revised. View here.

Currently telecommunication services as defined are excluded from the definition of electronic services and thus not subject to VAT on electronic services provided by a non-resident supplier to South African customers. Currently the Regulation refers to the definition for telecommunication services in the Electronic Communications and Transactions Act No 25 of 2002, which Act does not define telecommunication services. Read more here.

For more information, contact Virusha Subban and Jana Botha of Baker McKenzie.


Zambia introduced VAT on electronic services, which includes the supply of services via the internet, mobile telecommunication networks and any other electronic commerce infrastructure, effective 1 January 2020. Implementation of these provisions is still under consideration by the Zambian Revenue Authorities (ZRA) and Regulations in this regard are yet to be published.

Currently it appears that non-resident suppliers of electronic services may be required to appoint a tax agent in Zambia to account for the tax where that supplier does not have a registered office or permanent business address in Zambia. This could result in unwarranted costs for non-resident suppliers of electronic / digital services to Zambian customers. It may be necessary for the international digitally focused community to engage with the ZRA to have this requirement dropped.

For more information, contact Virusha Subban and Jana Botha of Baker McKenzie or Jackie Jhala from Corpus Legal Practioners.


The Zimbabwe Revenue Authority (ZIMRA) introduced VAT on the supply of radio and television services as well as electronic services supplied by an electronic commerce operator from outsize Zimbabwe to Zimbabwean residents effective 1 January 2020. Services such as radio and television broadcasting as well as electronic services like e-commerce transactions services for handling online orders, application hosting by application service providers and an processing capability that is obtainable on the internet now falls within the VAT net. The regime is still in its infancy and most of the modalities of its operation is yet to be crafted.

At the same time Zimbabwe imposed a Digital Services Tax (DST) which is effective 1 January 2019. Every non-resident person who provides services as a satellite broadcasting service or goods and services as an electronic commerce operator, which receives revenues in excess of USD 500 000 in any year of assessment, is required to appoint a Zimbabwean tax representative taxpayer and pay the tax due by (usually) the end of April each year. Due to the Covid-19 pandemic the due date for filing for the 2019/20 year has been deferred to end August 2020.

For more information, contact Virusha Subban and Jana Botha of Baker McKenzie or Miranda Khumalo of Atherstone & Cook.

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