Exploring the Potential Taxation of Facebook Advertisements in Ethiopia: Challenges and Opportunities
No Thumbnail Available
Date
2024-11-08
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
In recent years, social media platforms have emerged as powerful tools for advertising goods and
services, completely changing the landscape of global marketing. In Ethiopia, Facebook is the
most widely used platform, Advertisers pay to target Ethiopian consumers with their adverts.
However, Ethiopia does not tax FB for the revenue generated by Facebook advertisements
targeted at its population. The study aims to investigate and analyze the challenges and
opportunities of the potential implementation of tax on Meta, Facebook's parent company, for
advertising revenue derived from Ethiopian businesses and individual utilizing its advertising
services. Employing an exploratory research design, the study utilizes qualitative methods to gain
in-depth insights into the challenges and opportunities associated with such taxation. Data were
collected through interviews, online surveys, and focus group discussions with representative from
Ethiopia ministry of revenue, ministry of innovation and technology and INSA. Thematic analysis
of the data revealed several challenges, including Legal and Regulatory Framework, policy issues,
Awareness issues, Administrative Capacity, Administrative Negligence, International
Cooperation, local stakeholders’ collaboration issues, Transparency and Accountability,
Technological Challenges, and Non-Technological Infrastructure Issues. On the other hand, the
study identifies opportunities such as revenue generation, foreign currency gains, tax fairness,
employment creation, and the potential to combat tax evasion. These findings contribute to the
understanding of the complexities involved in taxing digital advertisements and offer valuable
insights for policymakers in Ethiopia. The study emphasizes the need for a well-structured
approach to harness the potential benefits while addressing the identified challenges.