Africa Tax in Brief
ANGOLA: Introduction of transfer pricing unit
A transfer pricing unit, set up as an administrative technical structure forming part of the Large Taxpayers Directorate of the General Tax Administration, was launched on 25 September 2017 and will be responsible for monitoring compliance with Angola’s transfer pricing regime introduced by Presidential Decree No.147/13 of 1 October 2013.
ETHIOPIA: Treaty with Cyprus enters into force
The Cyprus/Ethiopia Income Tax Treaty, 2015 entered into force on 19 October 2017 and will generally apply from 1 January 2018 in Cyprus and from 8 July 2018 in Ethiopia.
GHANA: Amended VAT Regulations for the pharmaceutical industry approved
The Value Added Tax ("VAT") (Exemption of Active Ingredients, Selected Inputs and Selected Drugs or Pharmaceuticals) (Amendment) Regulations, 2017 were approved by parliament on 3 November 2017. In terms of the Regulations, the 17.5% VAT/National Health Insurance Levy on selected imported medicines that are not produced locally, is abolished pursuant to the 2017 Budget.
GHANA: Electronic system for tax exemptions proposed
The Ministry of Finance, on 2 November 2017, announced the planned launch of an electronic tax exemption system, intended to deal with, inter alia, the application, approval and granting of exemption from taxes and import duty waivers, with effect from January 2018.
GHANA: Corporate tax exemption for private universities proposed
Plans to reinstate the exemption from corporate income tax, available to private universities prior to 2013, were announced by the vice president on 28 October 2017.
GHANA: Taxation (Use of Fiscal Electronic Devices) Bill, 2017 presented to parliament
Following a proposal in the 2017 Budget, the Minister of Finance presented the Taxation (Use of Fiscal Electronic Device) Bill, 2017 (the “Bill”) to parliament on 31 October 2017. In terms of the Bill, the use of Fiscal Electronic Devices (“FEDs”) is to be mandated in the collection of VAT to enable the Ghana Revenue Authority ("GRA") to monitor the collection of VAT on a real-time basis.
It is envisaged that the GRA will bear the cost of the initial distribution of the FEDs and taxable persons authorised to operate their own invoice generating systems will be required migrate to the use of the FEDs.
GHANA: Customs valuation clarification issued
The GRA, on 19 October 2017, issued a public notice regarding the valuation of goods for customs duty purposes, clarifying that:
- the "transaction value", ie, the actual price paid or payable for goods, freight, loading and handling costs, insurance and any other adjustment/addition, is the primary basis for determining the customs value of goods;
- where the customs value cannot be determined on the basis of the transaction value, the following methods of valuation may be adopted in hierarchical order:
- transaction value of identical goods;
- transaction value of similar goods;
- deductive value;
- computed value; and
- the declared transaction value of the goods must be supported by commercial invoices and bills of lading; and
- the GRA may request additional information in order to verify the transaction value declared for duty purposes.
KENYA: Market interest rate for fringe benefit tax published
The Kenya Revenue Authority published a market interest rate of 8% applicable for fringe benefit tax purposes for the period October to December 2017.
MOZAMBIQUE: Budget Bill 2018 presented
The Budget Bill, 2018 (Plano e Orçamento do Estado de Moçambique para 2018), approved by the Council of Ministers on 21 September 2017, is currently under discussion by the National Assembly.
NIGERIA: Tourism development levy proposed
The Nigerian Tourism Development Corporation Act (Repeal and Re-enactment) Bill, 2017 (the “Bill”), passed by the National Assembly on 19 October 2017, proposes to:
- repeal the Nigerian Tourism Development Corporation Act, Cap. N137, LFN, 2004;
- establish the Nigerian Tourism Development Authority; and
- impose the tourism development levy on hotels or similar hospitality/tourism establishments, all travellers leaving the country and corporate entities.
The Bill is currently awaiting presidential assent.
NIGERIA: Nigerian Investment Promotion Commission and Federal Inland Revenue Service published a compendium of investment incentives in Nigeria
The Nigerian Investment Promotion Commission and the Federal Inland Revenue Service recently published a “Compendium of Investment Incentives in Nigeria” dated 31 October 2017. The compendium is available at www.invest-nigeria.com.
SIERRA LEONE: Revenue Administration Act, 2017 enacted
Parliament, on 11 October 2017, issued a press release on the enactment of the Revenue Administration Act, 2017, aimed at reconciling and consolidating the rules for the administration of revenue laws and the collection of taxes, .
SIERRA LEONE: 2018 Budget presented to parliament
The Minister of Finance and Economic Development presented the 2018 Budget to parliament on 27 October 2017. The Budget includes proposals to:
- broaden the tax base by expanding the registration of taxpayers;
- enforce payment of withholding taxes on rental properties and taxes due by professionals;
- address the granting of substantial and ad hoc tax and duty exemptions, eliminate goods and service tax exemptions and reduce duty waivers;
- improve goods and service tax administration and compliance and automate the tax administration process; and
- adopt the Economic Community of West African States (ECOWAS) Common External Tariff.
SOUTH SUDAN: Financial Act 2017/18 enacted
The Ministry of Finance and Economic Planning published the Financial Act 2017/18 on 1 November 2017, introducing various tax measures effective from 11 September 2017, including:
- an 18% flat rate business profits tax on hotels, bars and restaurants, and manufacturing companies;
- increasing the withholding tax rate on technical service fee payments to non-residents to 15%; and
- increasing the personal income tax rate for sole proprietors from 10% to 15%.
ZAMBIA: Treaty with Norway enters into force
The Norway/Zambia Income Tax Treaty, 2015 entered into force on 9 August 2017 and generally applies from 1 January 2018, at which date it will generally replace the current Norway/Zambia Income Tax Treaty, 1971.