The Sunday News
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.