South Africa: Africa Tax
ANGOLA: Budget Law, 2017 details published -Africa Tax
On 10 February 2017, the provisions of Budget Law, 2017, enacted on 31 December 2016, were published.
In terms of the Budget Law, 2017 the 10% withholding tax on technical services and management fees paid to non-residents for the provision of foreign technical assistance or management services (Contribuição Especial sobre as Operações Cambiais de Invisíveis Correntes), which was introduced by Law No. 3/15 of 9 April 2015 and regulated by Presidential Legislative Decree No. 2/15 of 29 June 2015, continues to apply.
BURUNDI: Finance Law, 2017 details published - Africa Tax
The provisions of Finance Law, 2017, enacted on 31 December 2016, have been published. Significant amendments, which apply with effect from 1 January 2017, include:
- the continued application of the minimum lump-sum tax at a rate of 1% of annual turnover to both residents and non-residents deriving income in Burundi;
- an income tax exemption for interest on treasury bills and bonds;
- the continued use of cost, including insurance and freight costs, increased by customs duties and related charges, as the value-added taxable ("VAT") base of oil products;
- establishing that the VAT on the provision of goods or services to the state is payable at the time of payment of the goods or services by the customer;
- amendment of the general consumption tax rates applicable to beverages and cigarettes;
- introduction of an anti-pollution tax to be imposed on used vehicles and imported plastic bags as from 1 January 2017 at the following rates:
- BIF200 000 per used vehicle; and
- 50% of the customs value (FOB) on imported plastic bags; and
- introduction of a security fee at a rate of 1.5% of the value of imported merchandise. Merchandise imported to the presidency of the republic, national defence or national police is exempt from the fee.
GABON: Clarification on implementation of national solidarity sales tax under Finance Act, 2017 Africa Tax
The following changes were agreed to on 28 February 2017 with respect to the implementation of the national solidarity sales tax (contribution spéciale de solidarité or "CSS") under Finance Act, 2017:
- postponement of the entry into force from 1 March 2017 to 15 March 2017;
- allowing the CSS as a deductible expense for corporate income tax purposes, subject to confirmation by an amendment to the enacted Finance Act, 2017; and
- clarification that both the CSS and VAT will apply on the invoice amount before tax.
GHANA: Budget for 2017 Africa Tax
The Minister of Finance presented the Budget for 2017 to Parliament on 2 March 2017. Significant proposed amendments include:
- exempting gains realised from the sale of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission from capital gains tax;
- granting tax credits and other incentives for businesses that hire young graduates;
- undertaking a comprehensive review of the import duty waivers and tax exemptions granted to the various categories of persons in Ghana;
- abolishing the collection of VAT and the National Health Insurance Levy on financial services, selected imports and medicine not produced locally, domestic airline tickets and real estate sales;
- reducing the VAT rate for traders from 15% to 3%;
- exempting the financial services industry from the payment of stamp duty for two years;
- abolishing the imposition of the special import levy;
- reducing the special petroleum tax from 17.5% to 15%; and
- reducing the national electrification scheme levy rate from 5% to 3% and the public lighting levy from 5% to 2%.
LIBERIA: Ease of doing business reforms proposed
The Business Reform Committee on 14 February 2017 made the following recommendations to improve the business climate and the ease of doing business in Liberia:
- passing the new Customs Code;
- fast-tracking the implementation of the single window and verification of conformity contracts;
- reducing customs re-inspections and its impact on medium and small-scale enterprises;
- conducting a national review of fees and charges with the aim of reducing the costs of imports and exports;
- reducing the number of procedures and fees for obtaining construction permits; and
- signing the Insolvency Bill.
MALI: Draft decree amending General Tax Code adopted
On 3 March 2017, a draft decree was adopted that amends Decree No. 2012-277 / P-RM of 13 June 2012, laying down detailed rules for the application of certain provisions of the General Tax Code. Significant amendments include extending the concept of transfer pricing to transactions involving the purchase and sale of physical goods between affiliated companies.
NAMIBIA: Inland Revenue Department no longer accepting cheque payments
A press release dated 30 January 2017 serves to inform all taxpayers that, with effect from 1 June 2017, Inland Revenue Department will no longer accept cheques (including guaranteed cheques) as a means of payment for taxes.
Taxpayers are encouraged to make use of online banking facilities to do Electronic Fund Transfers for all tax payments or, alternatively, use a point of sale device, cash or direct deposits as a method of payment. Point of sale devices (speed point machines) are now available at all Inland Revenue offices countrywide, except for satellite offices.
The initiative by Inland Revenue follows on the issuing of a Public Notice by the Payment Association of Namibia that cheques will be completely phased out on 31 December 2017.
NIGERIA: NSITF and NECA agree the basis for employee compensation contributions
The Nigeria Social Insurance Trust Fund ("NSITF") entered into an agreement with the Nigeria Employers' Association ("NECA") regarding the basis for calculating contributions under the Employees' Compensation Act ("ECA"), 2010.
The ECA was signed into law in January 2011 and gazetted in July 2011, causing controversy with respect to the effective date for the commencement of the law. The NSITF and NECA had previously agreed to a forbearance of outstanding contributions for the period from 1 July 2011 to 31 December 2011 for members of NECA.
The new agreement, effective from 1 January 2017, provides further clarity on the following items:
- reiterating the forbearance period for NECA members and stating that the waiver would be considered on a case-by-case basis, subject to compliance with the ECA from 1 January 2012;
- agreeing that the definition of "remuneration" would be used for payroll excluding pension contribution, bonuses, overtime payments, irregular one-off payments like drivers' allowances, etc; and
- agreeing that response to long-standing claims must be resolved within four weeks after receipt of a formal complaint and settled within two weeks of submission of relevant documents.
NIGERIA: Amendments to Stamp Duty Act proposed
On 2 March 2017, the Stamp Duties Act (Amendment) Bill 2017 (the "Bill") passed the second reading in the House of Representatives. If passed into law, the Bill proposes to amend the Stamp Duty Act, 1939 ("SDA") as follows:
- repealing the exemption from stamp duty previously granted to bills of exchange, promissory notes and deposit slips;
- increasing the stamp duty on policies for insurance against accident from 60 kobo to NGN200;
- requiring that electronic/paperless instruments and transactions be denoted with adhesive postage stamps or ink electronically generated online through the internet;
- revising the definition of a stamp to mean a stamp impressed by means of a dye or ink electronically generated online through the Internet, embossed through a point of sale machine or an adhesive stamp with a face value or specified value;
- increasing the threshold for charging duty on receipts from NGN4 to NGN1 000; and
- increasing the penalties for offences committed under the SDA.
RWANDA: Requirements for VAT exemption order issued
The Minister of Finance and Economic Planning published Order No.001/17/10/TC of 30/01/2017, effective from 13 February 2017, in the Official Gazette, clarifying the following as eligibility requirements for an industry to claim an exemption from VAT on machinery, capital goods and raw materials:
- being registered as a company in Rwanda;
- processing raw materials to produce goods for sale or for mining and quarry exploitation;
- restricting application to the items contained in the approved list issued by the relevant minister;
- demonstrating the direct link between the goods for which exemption is sought and the industrial activity that would be carried out;
- addressing the application to the Commissioner General of the Rwanda Revenue Authority in the prescribed form (for locally produced machinery, capital goods and raw materials); and
- submitting a declaration form to the Commissioner for Customs in respect of imported machinery, capital goods and raw materials.
SEYCHELLES: Progressive income tax implementation postponed Africa Tax
On 14 February 2017, the President announced via a State of the Nation Address that, due to the complex implementation process, the comprehensive progressive income tax (initially scheduled for 1 July 2017) has been postponed to 1 January 2018.
SOUTH SUDAN: Taxation Amendment Act, 2016 enacted
On 15 February 2017, the Ministry of Finance and Economic Planning published the Taxation Amendment Act, 2016 which had been signed into law on 20 December 2016. Significant amendments, which became effective on 20 December 2016, include:
- all exemptions from business profits tax granted under the Investment Promotion Act, 2009 and other non-tax legislation are null and void;
- exemptions from personal income tax granted under the Emoluments, Entitlements and Privileges of Executive and Legislative Constitutional Post Holders Act, 2010 and other non-tax legislation are null and void;
- revision of the lower band of personal taxable income;
- amendment of the sales tax rate for domestically produced goods, imported goods, hotels, restaurants and bar services;
- increasing the final withholding tax rate on rent from 10% to 20%;
- introducing a final 20% withholding tax on contract payments by government institutions; and
- introducing a final 10% withholding tax on payment of technical fees (technical, managerial and consultancy services performed in South Sudan) to non-residents on amounts exceeding SSP10 000.
UGANDA: Introduction of digital tax stamps proposed
On 28 February 2017, the Uganda Revenue Authority announced the planned imposition of digital tax stamps ("DTS") on excisable goods and other goods as may be gazetted by the Minister. DTS are physical paper stamps applied to goods or their packaging to ensure a seamless monitoring and compliance process.
The use of DTS is aimed at:
- simplifying the process of obtaining VAT refunds;
- fast-tracking the customs clearing process;
- generating data automatically for the submission of tax returns; and
- addressing tax evasion and smuggling on cross-border transactions.