Policy Brief

Crafting a Model for Taxing Digital Financial Services

Policy Brief 11

The taxation of mobile money (MM) and other digital financial services (DFS) is a multifaceted and evolving issue. It has become a significant concern and source of controversy over the last decade. As yet, there is no universally accepted standard approach to taxing DFS, but the complexity of the issues underscores the need for a clear and holistic framework. While much has been written about tax and DFS, direct guidance to policy-makers is scarce; other than, perhaps, to avoid taxing them at all (GSMA 2023a, 2023b; Vodafone 2023).

In this policy brief we aim to fill that gap, and offer some brief but specific thoughts about how a tax regime for DFS might be constructed, drawing on experience from the DIGITAX research programme. We do not claim that our model is comprehensive, or that the evidence base for it is complete, but we believe it is preferable to leaving a vacuum in policy guidance.

Authors

Christopher Wales

Christopher Wales is an ICTD consultant working as an Associate Research Fellow with the DIGITAX programme. He has worked with Prime Ministers and Finance Ministers in many countries on economic and fiscal policy, fiscal institutions, revenue administration, labour market issues and pension policy. Chris is currently Chairperson of the Board of Directors of the Rwanda Social Security Board, member of the Council of the Institute for Fiscal Studies, and member of the Advisory Board of the Oxford University Centre for Business Taxation, which he was instrumental in founding.

Hannelore Niesten

Hannelore Niesten is an ICTD consultant working as a Research Officer for the DIGITAX programme. Hannelore holds a PhD in Law from Maastricht University and Hasselt University (double degree), an LLM in Business and Finance law from George Washington University, Advanced Masters in Tax Law and Notary Law from the Catholic University of Louvain, and Masters in Globalization and Law, and European Law from Maastricht University.
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Publication Details

Publisher: Institute of Development Studies
Date: August 2024
Citation: Wales, C. and Niesten, H. (2024) Crafting a Model for Taxing Digital Financial Services, ICTD Policy Brief 11, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2024.080