Abstract
Digitalization has intensified globalization and economic interactivity between countries
both developed and developing, increasing the complexity and lack of transparency in economic
activities. The increase in digital transactions poses a remarkable challenge for tax authorities yet the
digital economy is slowly replacing traditional commercialization and transactions. Conventional
international tax legislation has not kept abreast with the growth and complexity of the digital
economy and its accompanying challenges with respect to taxation. In view of the infant nature
of digital tax legislation in African countries as well as the auspicious possibility of increasing tax
revenue to fund public expenditure together with the probability of contradictory outcomes of digital
tax policy, through a critical literature review this paper assesses digital taxation through direct
digital service taxes (DSTs) in Africa. The findings were mixed. While the possibility of tax revenue
maximization and improved economic growth were persuasive, the arguments pointing to negative
externalities emanating from poor digital service tax policy design were equally pragmatic