Digital transformation is enabling multinational companies to operate without a physical presence in the countries where they do business. This poses a significant fiscal challenge for African economies. As a result, it is urgent to regulate the activities of these digitally-enabled multinational firms.
The Senegalese Directorate General of Taxes and Domains (DGID) recently announced the introduction of a digital services tax, effective from July 1st. This measure aims to tax the revenues of foreign digital companies and platforms operating in the country, in accordance with Article 355 bis of the General Tax Code (CGI).
The tax will apply specifically to online marketplaces facilitating transactions between suppliers and customers, platforms for downloading and streaming music, movies, and online games, as well as data storage and processing services via cloud and database management services. It will also cover online learning and teaching platforms, and content hosting services such as websites, images, and text. Digital giants like Google, Apple, Meta, Amazon, and Microsoft are particularly targeted by this tax.
