ATAF High-Level Tax Policy Dialogue: Ensuring Africa's Voice in the Debate on Taxing the Digital Economy 2019 | African Tax Administration Forum (ATAF) | 31 July 2019 | Elephant Hills Resort, 328 Park Way, Victoria Falls, Zimbabwe

Many African countries have reported concerns about the tax challenges they face as their economies become increasingly digitalised. Digitalisation enables multinational enterprises (MNEs) to carry out business in African countries with no or very limited physical presence. This makes it difficult for African countries to establish taxing rights over the profits the MNE is making from the business activities it carried out. Digitalisation raises the question of how taxing rights on income generated from cross border transactions should be allocated between jurisdictions. The allocation of taxing rights between residence and source jurisdictions has been an issue of considerable concern for African countries for many years. African countries are generally source countries and tax on a source basis[1]. ATAF members often report that they consider the current nexus and profits allocation rules are weighted too heavily in favour of the residence jurisdiction to the detriment of the source (African) jurisdiction.