The article discusses the evolving landscape of taxation in the digital economy and its implications for multinational companies and African countries. Previously, big tech firms operated under the standard international tax system, paying taxes primarily in their home countries. However, the rise of digitalization and the ability to generate revenue without physical presence have prompted foreign governments to impose taxes on revenues drawn from local consumers.

To address these challenges, the OECD and the G20 Inclusive Framework proposed a two-pillar solution. Pillar 1 focuses on reallocating profits to jurisdictions where sales occur, expanding countries' authority to tax non-resident companies. Pillar 2 introduces a global minimum tax rate to ensure multinational companies pay a minimum effective tax rate on income generated in low-tax jurisdictions. However, not all African countries have fully embraced this framework.

Several African countries, including Nigeria, Kenya, and Uganda, have implemented digital services taxes (DST) on non-resident companies. However, the adoption of the Pillar Two framework in Africa varies. Nigeria has not endorsed the agreement, citing compliance complexity and high implementation costs. Kenya announced its intention to withdraw objections and repeal the DST to align with the OECD framework. Uganda proposed a DST, but it was rejected by the parliament.

The article concludes that the implementation of a global minimum tax rate in African countries depends on factors such as the presence of multinational corporations and revenue derived from digital services. It suggests that a global consensus on minimum tax on digital services would not hinder investments in Africa's digital economy.

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