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Zimbabwe looks to tax SoHo, e-commerce and pay-TV services

Zimbabwe looks to tax SoHo, e-commerce and pay-TV services

In addition to US$17.9 million set aside to strengthen its ICT backbone, Zimbabwe's government is looking to tax offshore e-commerce and pay-TV companies providing services in the Southern African country.

As a result of progress with technology, locals are able to pay for international satellite television services and access global e-commerce platforms. The government considers these potential revenue streams.

During his presentation of the 2019 budget, Finance Minister Mthuli Ncube said, "Technological advancements have enabled foreign companies, particularly satellite broadcasters and e-commerce platforms to provide local residents with services from offshore sources."

In a bid to "broaden the tax base" the government is considering "income earned by such non-resident service providers to be from a source within the country and liable to tax" collections.

MultiChoice has activated options for payment of Zimbabwe service from South Africa after partnering with retail outlets.

Local IT experts said the government, which has already stipulated that import duty on luxury goods must be paid in Forex, is eyeing the market for goods bought through e-commerce sites from international markets.

The country's revenue collection plans to swoop on home-based offices and ICT entrepreneurs as per revenue consolidation measures announced by Ncube.

Zimbabwe's ICT has been pivotal in propping up the struggling economy and the government will advance in 2019 finances to further develop ICT infrastructure, including innovation hubs and "spin off industries".

According to market analysts ICT and telecoms is expected to play a major role in an economic revival – although the shortage of Forex and liquidity continue to hamper investment in infrastructure development and network expansion.

Zimbabwe expects its economy to grow by 4% in 2018 and by 3.1% in 2019. Revenues for 2019 have been projected at US$$6.6 billion, although government expenditures will still outstrip the budget, leaving a US$1.6 billion deficit for 2019.

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