Namibia is considering imposing taxes on global digital platforms such as Netflix, Spotify, Google and Starlink, as the government moves to capture revenue from foreign companies that generate income locally without a physical presence in the country.
The Ministry of Information and Communication Technology said it is in advanced discussions with the Ministry of Finance on proposals to tax digital services supplied by non-resident providers, Information Minister Emma Theofelus confirmed.
“Tax on digital products is definitely in the works. The finance minister and I are at advanced talks,” Theofelus said, without giving a timeline for when the measures could be introduced.
Government officials familiar with the discussions said the proposal under consideration would apply a 15 percent value-added tax (VAT) to payments made by Namibians for digital services provided by foreign companies. The platforms affected could include streaming services such as Netflix and Spotify, ride-hailing and mobility apps like Yango and inDrive, as well as global technology firms including Google and satellite internet provider Starlink.
VAT is a domestic consumption tax and would apply to transactions that would ordinarily attract VAT if the service were supplied by a local company. Officials said the aim is to place foreign digital firms on a similar footing to domestic businesses, which are already subject to local taxes.
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The proposed system is expected to rely on local financial institutions to ensure compliance, with banks potentially required to collect VAT at the point where payments for digital services are processed. Similar models have been adopted in other countries where governments lack direct jurisdiction over foreign service providers.
The move reflects a broader debate across Africa over how to tax digital and so-called over-the-top (OTT) service providers, which have expanded rapidly across the continent. Governments argue that these companies generate substantial revenue from local consumers while contributing little or nothing to national tax bases because they operate without offices, staff or infrastructure on the ground.
Under traditional international tax rules, companies are generally required to have a permanent establishment in a country before they can be subject to corporate income tax. Digital business models, however, allow firms to operate seamlessly across borders, selling services directly to consumers online and accepting payments remotely.
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Namibian officials say this has created what they view as an uneven playing field between foreign digital firms and local companies, which face higher compliance costs and tax obligations.
In response to similar concerns, several African countries have already introduced new tax measures targeting the digital economy. Kenya, Nigeria, Tunisia, Zimbabwe and Sierra Leone have implemented digital services taxes aimed specifically at revenue earned from online platforms. Other countries, including Kenya and Mauritius, have expanded their VAT regimes to cover digital services supplied by non-resident companies.
The trend has accelerated as governments seek new revenue sources to fund public services and reduce budget deficits, particularly in the aftermath of the COVID-19 pandemic and amid rising debt levels.
Namibia has not yet indicated whether it plans to introduce a standalone digital services tax or rely solely on VAT. Analysts say a VAT-based approach is often easier to administer and less likely to trigger disputes with trading partners, as it is framed as a consumption tax rather than a levy on corporate profits.
Beyond national measures, African governments are also involved in international efforts to reform global tax rules for the digital economy. Many are participating in discussions under the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting (BEPS) framework, which seeks to ensure that multinational companies pay taxes where economic activity and value creation occur.
Progress at the global level has been slow, prompting many countries to pursue unilateral solutions in the meantime.
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In Namibia, officials say any new tax on digital services would be designed to balance revenue collection with the need to avoid stifling access to online platforms that have become integral to entertainment, communication and business.
Digital services have grown rapidly in the country, driven by rising smartphone use, improved connectivity and a young, urban population. Streaming platforms, music services and app-based transport have become especially popular, even as regulators struggle to keep pace with the speed of technological change.
If implemented, the proposed tax would mark a significant shift in Namibia’s approach to the digital economy and align it more closely with a growing number of African states seeking to modernise their tax systems for the online age.
