Search
AI-powered
search, human-powered content.
We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
An Uber taxi driver sits in his car in Nairobi, Kenya.
Uganda’s parliament just passed a tax on foreign digital service providers, joining the growing number of African governments trying to recoup some of the massive revenues tech giants are generating within their borders.
The 5% levy would apply to companies like Meta, Amazon, Uber, Google, and other tech firms that pay minimum taxes to African nations because they don’t have headquarters on the continent. Uganda’s finance minister highlighted Uber — domestic drivers generate profits that go to Silicon Valley rather than the Great Rift Valley — as the main reason the tax was necessary.
The same argument could apply to the billions of dollars generated from the data of Africa’s 570 million-and-counting internet users. Nigeria, Kenya, and Tanzania have implemented similar levies on digital services.
But the Ugandan opposition fears that companies could push the costs of taxes onto locals that rely on digital platforms, from Uber drivers to content creators. Kenya, which implemented a 1.5% levy on digital services last year, is facing protests after proposing an additional 15% tax on content creators.
In 2021, the OECD began leading negotiations on a global digital tax, which has so far been stymied by the US, which is home to many of the companies that would be directly affected. The OECD argues that a digital tax is needed to revamp brick-and-mortar tax rules for the modern global economy, making companies pay taxes where they have customers or users, rather than just where they are headquartered.