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Africa Tax in Brief 

by Celia Becker

Published: August, 2017

Submission: August, 2017

 



BOTSWANA: Amending protocol to treaty with France signed

On 27 July 2017, Botswana and France signed an amending protocol to the Botswana/France Income Tax Treaty, 1999 in Gaborone.


CAMEROON: VAT refund procedure available online

The Cameroonian Minister of Finance issued a communiqué on 14 June 2017, announcing that the value-added tax (“VAT”) refund procedure has been simplified and is available online as from 3 July 2017 for enterprises registered with the Large Tax Unit. This will be extended to medium-sized enterprises on 1 October 2017. 

KENYA: Guidance on tax amnesty issued

The Kenya Revenue Authority issued revised guidelines on the tax amnesty on foreign assets and income on 17 July 2017. The Guidelines are dated 10 July 2017, but apply retrospectively from 1 January 2017, and replace the original guidelines issued on 8 March 2017.


The Guidelines clarify the definition of “funds” to which the amnesty applies and provide guidance on the procedures for claiming the amnesty.

KENYA: Withholding tax on bank charges on Nostro accounts

The Tax Appeals Tribunal has recently ruled that bank charges arising from Nostro accounts used by banks to facilitate international trade between non-resident banks and Kenyan banks are not subject to withholding tax on the basis that such charges are not interest relating to some form of indebtedness and do not constitute income accrued in or derived from Kenya by the foreign bank.

LIBERIA: Administrative Regulation on special tax incentives issued

On 24 July 2017, the Ministry of Finance and Development Planning published Administrative Regulation No.1.16/MFDP/FAD/RTPD/06/07/2017, containing, inter alia, a list of sectors qualifying for special tax incentives under the Revenue Code. Companies in the following qualifying sectors are entitled to exemptions from goods and services tax and import duties, with effect from the date of publication: tourism, manufacturing, energy, health services, real estate, transport, technology, agriculture, poultry, horticulture, exportation of sea products, rubber and oil palm cultivation and processing and waste management.

LESOTHO: 2017/18 Budget presented to Parliament

The Minister of Finance presented the 2017/18 Budget to Parliament on 19 July 2017. Proposed measures include:


  • in respect of personal income tax: increasing the annual tax credit from LSL6 735 to LSL6 927; amending the minimum annual taxable income from LSL33 625 to LSL34 634; and revising the threshold for higher earners from LSL56 964 to LSL58 673.
  • in an effort to enhance trade, the Business Licensing and Registration Bill, Competition Bill and Trade and Tariff Administration Bill were presented to Parliament.

MALAWI: Taxation Regulations, 2017 published

On 30 June 2017, the following Regulations, giving effect to the withholding tax, customs and excise duties and tax administration proposals contained in the 2017/18 Budget, were published in the Official Gazette: 


  • Taxation (Withholding Tax) (Information, Deduction and Payment) (Amendment) Regulations, 2017
  • Taxation (Fringe Benefit Tax) (Information and Payment) (Amendment) Regulations, 2017
  • Income Tax (Pay-as-you-earn) (Information) (Amendment) Rules, 2017
  • Income Tax (Pay-as-you-earn) (Deduction and Payment) (Amendment) Rules, 2017
  • Customs and Excise (Tariffs) (Amendment) (No. 4) Order, 2017

The Regulations generally amend existing ones regarding penalties and interest on non-compliance and became effective from 1 July 2017, except for the Customs and Excise (Tariffs) (Amendment) (No. 4) Order, 2017, which became effective on 19 May 2017. 

The Taxation (Transfer Pricing Documentation) Regulations, 2017 and the Taxation Regulations 2017 (collectively the “TP Regulations") were published in the Official Gazette on 3 July 2017 and apply effective from 1 July 2017, repealing the current TP Regulations in the Taxation Act.

The TP Regulations provide the following guidance regarding controlled transactions:


  • contemporaneous documentation requirements for controlled transactions.
  • language and time frame for the submission of TP documents.
  • discretional powers bestowed on the Commissioner General of the Malawi Revenue Authority to request additional documents.
  • applicable penalties for offences.
  • approved transfer pricing methods.
  • principles of comparability and sources of information on comparable uncontrolled transactions
  • transactions involving intangible property.
  • services between related parties.
  • corresponding adjustments for domestic and international transactions.

The TP Regulations are to be interpreted in accordance with the Organisation for Economic Cooperation and Development’s Transfer Pricing Guidelines for Multinational Persons and Tax Administrations (“OECD Guidelines”), but the provisions of the Taxation Act as amended, and the TP Regulations, will prevail where there is any inconsistency with the OECD Guidelines. 

MOZAMBIQUE: Social security agreement with Portugal enters into force

The Mozambique/Portugal Social Security Agreement, 2010 entered into force on 1 July 2017. The agreement generally applies from 1 July 2017. 

NIGERIA: Interest rate on unpaid taxes for 2017 announced

The Minister of Finance announced that, effective from 1 July 2017, the applicable interest rate for non-payment of taxes will be calculated based on a 5% spread on the monetary policy rate (“MPR”) as fixed by the Central Bank of Nigeria periodically. The current MPR published by the Central Bank of Nigeria is 14%, and the applicable interest rate for non-payment of taxes accordingly 19%. 


The interest rate spread approved for 2015 was 2%, while the MPR was 13%, resulting in an interest rate of 15%, but no interest rate regime was announced for the period 1 January 2016 to 30 June 2017.

NIGERIA: Court of Appeal affirms that Tax Appeal Tribunal has jurisdiction over tax disputes 

On 10 March 2017, the Court of Appeal (“CoA”), in CNOOC Exploration & Production Nigeria Limited & Anor. v Nigerian National Petroleum Corporation & Anor, affirmed that the Tax Appeal Tribunal (“TAT”) has jurisdiction over tax disputes. The CoA ruling sets aside an earlier decision by the Federal High Court that the TAT lacks the jurisdiction to hear tax disputes. 

The CoA confirmed the ruling in Shell Nigerian Exploration and Production & Ors. v FIRS & Anor that the TAT is a vital step in the dispute resolution process for tax matters.

SOUTH SUDAN: 2017/18 Draft Budget and Financial Bill presented to Parliament

The Minister of Finance and Planning presented the 2017/18 Draft Budget and the 2017/18 Financial Bill to the Transitional National Legislature on 30 June 2016. The proposed tax measures include:


  • implementing the tax measures set out in the 2016 Taxation Amendment Act as re-stated in the 2017/18 Financial Bill as reported on earlier.
  • increasing the personal income taxes for sole proprietors from 10% to 15%.
  • increasing the air departure tax from USD20 to USD30.
  • establishing the National Revenue Authority for the administration and collection of taxes.
  • strengthening customs management by introducing a stamp tracking system for imports.
  • aligning customs practices with those of the East African Community.

TANZANIA: Finance Bill, 2017 passed by Parliament

Parliament passed the Finance Bill, 2017 into law on 22 June 2017. The Bill proposes to amend various laws to give effect to the 2017/18 Budget proposals reported on previously.

UGANDA: Supreme Court rules that Tax Appeals Tribunal has original jurisdiction on tax disputes

On 10 July 2017, the Supreme Court held in Uganda Revenue Authority v. Rabbo Enterprises (U) Ltd & MT. Elgon Hardwares Ltd that the Tax Appeals Tribunal (“TAT”) has original jurisdiction over all tax disputes. The Supreme Court ruling sets aside an earlier decision of the Court of Appeal that concurrent jurisdiction exists between the High Court and the TAT over tax disputes. 

The Supreme Court held that: 


  • the Constitution confers the jurisdiction to handle all tax disputes on the TAT, hence tax disputes can only be taken before the High Court on appeal from the TAT;
  • the TAT Act does not grant a taxpayer the choice of where to lodge a tax appeal, as this would result in an absurdity whereby the High Court has dual jurisdiction; and
  • decisions of the TAT are enforceable in a like manner as an order from the High Court.

 


 


Footnotes:

Sources include IBFD’s Tax Research Platform; www.allafrica.com; http://tax-news.com


 

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