Addressing Digital Economy Taxation Challenges
Production: Ubora Academy of the African Capacity Building Foundation (ACBF) under the African-Finnish Partnerships on Taxation Capacity in Africa (AFP-TCA) Program funded by the Ministry for Foreign Affairs of Finland.
Curriculum Developer: Dr. Lyla Latif
Course Description
Addressing Digital Economy Taxation Challenges examines the “fundamental mismatch” between traditional international tax rules designed for physical businesses and the borderless nature of the modern digital economy. Participants will explore why legacy concepts like Permanent Establishment (PE) are failing and evaluate modern frameworks designed to ensure multinational tech giants contribute fairly to the jurisdictions where they generate value. The curriculum analyzes the shift from physical presence requirements to nexus standards based on digital engagement. It highlights the revenue loss faced by nations—using case studies like Netflix and Amazon—and compares competing global responses, such as the OECD’s Pillar One, the UN’s Article 12B, and unilateral Digital Services Taxes (DSTs). Additionally, the course covers practical administrative solutions and future-oriented technologies like AI and blockchain for real-time tax collection.
What will you learn?
- Participants can expect to learn why 20th-century rules, which require a “fixed place of business” to tax profits, allow digital companies to serve millions of users with near-zero local tax obligations. This includes understanding how companies like Google and Facebook operate without a physical PE.
- Comparison of Global Policy Frameworks: You will evaluate the trade-offs between complex international solutions like Pillar One (which targets only the largest 100 companies) and simpler, source-based approaches like the UN’s Article 12B or Significant Economic Presence (SEP) taxes used in Kenya, Nigeria, and India.
- Modern and Future Administrative Tools: You will explore how tax authorities are using API-based real-time monitoring (such as Kenya’s GAVA Connect) and Smart Contracts to automate tax collection at the point of sale, bypassing the need for manual audits and periodic filings
