Govt to levy tax on Net­flix, YouTube

Sunday News (Zimbabwe) - - Front Page - Bruce Ndlovu

WHILE they have been able to en­joy a free reign in most coun­tries around the globe, stream­ing ser­vices like YouTube and Net­flix will soon have the tax­man knock­ing on their doors as Zim­babwe, through its na­tional bud­get an­nounced by Fi­nance Min­is­ter Mthuli Ncube, joined other coun­tries in try­ing to levy tax on plat­forms that have shaken up the broad­cast­ing scene.

The noose seems to be tight­en­ing on the stream­ing ser­vices, which have so far man­aged to op­er­ate with­out the hin­drance of re­mit­ting taxes to the var­i­ous coun­tries which they pro­vide ser­vices in.

In his re­cent bud­get pre­sen­ta­tion, Min­is­ter Ncube said that should not be the case.

“Mr Speaker Sir, tech­no­log­i­cal ad­vance­ments have en­abled for­eign com­pa­nies, par­tic­u­larly satel­lite broad­cast­ers and e-com­merce plat­forms to pro­vide lo­cal res­i­dents with ser­vices from off­shore sources.

“This in­come is sub­ject to tax and the ac­tiv­ity gen­er­at­ing the in­come is ac­tu­ally paid from a source within Zim­babwe. For the avoid­ance of doubt and in or­der to broaden the tax base, I pro­pose to deem in­come earned by such non-res­i­dent ser­vice providers to be from a source within the coun­try and li­able to tax,” he said in his state­ment.

Only a few days af­ter that an­nounce­ment, South Africa an­nounced that it would be tak­ing mea­sures of its own against dig­i­tal broad­cast gi­ants like Net­flix and YouTube. The South African Na­tional Trea­sury re­cently pub­lished an amended reg­u­la­tion for elec­tronic ser­vices which has an ef­fec­tive date of 1 April 2019 and will im­pact in­ter­na­tional sup­pli­ers of ser­vices to South African cus­tomers, who must now eval­u­ate whether their sup­ply of ser­vices qual­i­fies as “elec­tronic ser­vices” and whether this will cre­ate a li­a­bil­ity to regis­ter for VAT in South Africa.

The move in both coun­tries will prob­a­bly de­light tra­di­tional broad­cast ser­vice providers like DStv that have been strug­gling to main­tain their dom­i­nance since the emer­gence of the new stream­ing ser­vice.

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