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Tanzania introduces tax on digital revenues targeting Google, Facebook, others

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Global digital giants like Google, Facebook, Whatsapp, Instagram, and other digital platforms operating in Tanzania will have to start paying a 2% revenue tax beginning from July this year, according to the East African country’s finance ministry.

Finance and Planning Minister, Mwigulu Nchemba, who made the announcement in a proposed tax regime on Wednesday during the annual budget presentation to parliament, said the proposal is only awaiting waiting parliament approval before implementation.

“The Tanzania Revenue Authority will establish a simplified registration process for digital economy operators who do not have a presence in Tanzania.

“This is to keep pace with the rapid growth of the digital economy,” Nchemba said while addressing journalists after his presentation.

The announcement comes after discussions between the Tanzania Revenue Authority and the US social media giant, Meta, the parent company of Facebook, Instagram and WhatsApp, which held in April.

It also follows on the heels of many countries including Nigeria introducing such digital taxes, with the belief that since the companies are making profits in their countries, they should also pay taxes there.

So far, 136 countries have agreed on a framework tax agreement under the auspices of the Organisation for Economic Cooperation and Development (OECD), with the agreement providing for taxation in each country of operation of a minimum portion of the income earned by US digital giants, as well as a minimum global tax rate to avoid tax optimisation.

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World Bank predicts Mozambique economy growing at 5.7% on average

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The World Bank has predicted that the economic growth in Mozambique is expected to accelerate in the medium term averaging 5.7% between 2022 and 2024, as a result of demand recovery and economy benefits from the start of liquefied natural gas production this year.

In a report released Thursday, the World Bank said the start of LNG production at the offshore Coral Project and the expected resumption of other LNG projects would help spur the southeast African nation’s growth in the intervening year.

The World Bank said a three-year extended credit facility arrangement agreed by Mozambique with the International Monetary Fund (IMF) and budget support from other partners would further help to strengthen its economic recovery.

The IMF’s executive board had, in May, approved a $456 million program for the country, the first since the global lender suspended support to Mozambique six years ago.

However, the World Bank warned that risks remained for Mozambique’s growth, especially from rising import prices due to the conflict in Ukraine, a possible surge in COVID infection waves, and insurgency in the north.

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Nigeria, Algeria, Niger to revive Saharan gas pipeline talks

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The governments of Nigeria, Algeria and Niger Republic have held talks to revive a gas pipeline project across the Sahara which had been put on hold for over 40 years, with the potential opportunity for Europe to diversify its gas sources as the world faces a short fall as a result of the Russian-Ukraine war.

The three countries, represented by their various Petroleum Ministers, met in Abuja, Nigeria’s capital on Wednesday and resolved to set up a task force to revive the project and designated an entity to update the feasibility study.

A statement by Niger’s Oil Ministry after the two-day meeting stated that the Trans-Saharan gas pipeline project estimated at $13 billion, could send up to 30 billion cubic metres a year of supplies to Europe.

The statement added that the energy ministers of the three countries will meet again in Algiers at the end of July to “validate the proposals of the newly installed task force.”

“The pipeline should allow Europe to diversify its sources of natural gas supply but also allow several African states to access this high value energy source,” the statement said.

“With a length of 4,128 kilometres (2,565 miles), the pipeline would start in Warri, Nigeria, and end in Hassi R’Mel, Algeria, where it would connect to existing pipelines that run to Europe,” it said.

The gas pipeline idea was first proposed more than 40 years ago with an agreement signed between the three countries in 2009, but progress stalled stalled following a lack of follow through by the countries.

Earlier this month, Nigeria also took steps to revive another gas pipeline project that would pass through West Africa, Morocco to Europe.

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