Africa Tax in Brief
AFRICA: African Continental Free Trade Area Agreement developments
Botswana and Zambia signed the African Continental Free Trade Area Agreement (“ACFTA”) on 10 February 2019 at the 32nd summit of the African Union in Addis Ababa, whereas the Ethiopian Council of Ministers approved the ACFTA on 2 February 2019 and the Parliament of Senegal on 23 January 2019.
The Ivory Coast, Mali and Mauritania deposited their instruments of ratification for the ACFTA on 23 November 2018, 1 February and 11 February 2019, respectively.
ANGOLA: Value-Added Tax Code enacted
The Angolan National Assembly approved a bill enacting the new Value-Added Tax (“VAT”) Code in January 2019. The VAT system is to replace the current consumption tax regime, broadening the tax base and introducing a single tax rate of 14% with effect from July 2019.
VAT will be implemented in two phases, firstly in respect of large taxpayers and other (eligible) entities that opt for immediate application and, secondly, in respect of all taxable persons.
ANGOLA: 2019 State Budget Law published
Law No. 18/19 of 28 December 2018, approving the 2019 State Budget Law, was published on 28 December 2018.
In terms of the Law:
BOTSWANA: 2019 Budget Speech
Botswana’s 2019 Budget was delivered by the Minister of Finance and Economic Development to the National Assembly on 4 February 2019. The minister announced the continued need to expand the tax base through a review of tax legislation and regulations and announced that:
CHAD: Finance Law 2019 published
The Finance Law 2019 was published under Law No. 37 for 2018 on 31 December 2018. Significant amendments, effective from 1 January 2019, include the following:
DEMOCRATIC REPUBLIC OF CONGO (DRC): Free revaluation of corporate fixed and financial assets applicable to years 2018 and 2019
The Finance Minister tasked the Director General of the Tax Authority (Direction Générale des Impôts) and the Secretary General of the National Accounting Office (Conseil Permanenant de Comptabilité au Congo) on 20 December 2018 with developing a new tax regime for the free revaluation of corporate fixed and financial assets, taking into consideration the revised OHADA Accounting system (SYSCOHADA) applicable as of 1 January 2018. The relevant amendments are expected to be introduced in the draft Finance Law 2020.
DRC: New payroll tax return published
The tax authority on 2 February 2019, published Statement No. 01/005/DGI/DG/IS/BSE/NK/2019 introducing a new payroll tax return model (déclaration unique des impôts, cotisations sociales et contributions patronales sur les rémunérations) to be used as of February 2019, taking into consideration the new social contribution rates effective from 1 January 2019.
GHANA: VAT (Amendment) (No. 2) Bill 2018 presented to parliament
The Minister of Finance presented the VAT (Amendment) (No. 2) Bill 2018 to parliament on 3 December 2018. Significant amendments to the VAT Act 2013 (Act 870) proposed to become effective from 1 January 2019 include:
GHANA: Guidance notes on exchange of financial account information published
The GRA, on 21 January 2019, published guidance notes on the automatic exchange of financial account information in tax matters as required in terms of the Standard for Automatic Exchange of Financial Account Information Act 2018 (Act 967), which is based on the OECD Common Reporting Standard (“CRS”).
The guidance notes are limited to providing guidance on aspects of the CRS that are particular to Ghana and must be considered as supplementary to the OECD Commentary and related documents on CRS and the Multilateral Competent Authority Agreement on Exchange of Financial Account Information.
GHANA: Tax stamp policy on textiles suspended
The Ministry of Finance, on 21 January 2019, suspended implementation of the tax stamp policy (introduced earlier in February 2019) for the textile industry.
KENYA: High Court interprets "service exported out of Kenya"
On 21 December 2018, the High Court delivered judgment in the case ofCommissioner of Domestic Taxes v Total Touch Cargo Holland, (Nairobi Income Tax Appeal No. 17 of 2013) on when services are deemed to be exported and thus zero-rated for VAT purposes.
The court ruled that for a service to be deemed an exported service, the determining factor is the location where that service is to be finally used or consumed, irrespective of where such service was performed. An exported service will, accordingly, be one which is provided for use or consumption outside Kenya.
MAURITANIA: Convention on Mutual Administrative Assistance in Tax Matters signed
On 12 February 2019, Mauritania became the 127th jurisdiction to join the multilateral Convention on Mutual Administrative Assistance in Tax Matters, as amended by the 2010 protocol.
MAURITIUS: Guidelines on appropriate use of information in CbC reports published
The Mauritius Revenue Authority (“MRA”) published guidelines on the appropriate use of information contained in country-by-country (“CbC”) reports on 22 January 2019, highlighting that information obtained through CbC reports needs to be appropriately used by the MRA during transfer pricing audits.
NAMIBIA: Inland Revenue Service launches e-service
The Namibia Inland Revenue Service launched its e-service portal, accessible on the Integrated Tax Administration System (ITAS) website, on 17 January 2019.
Existing taxpayers have to sign up and link their tax identification number (“TIN”) in order to create an e-service profile. Taxpayers must also create TINs with their commercial banks before making any tax payments after 17 January 2019.
NIGERIA: FIRS suspends bank account freezing directive
The Federal Inland Revenue Service (“FIRS”), on 15 February 2019, informed banks of a 30-day temporary suspension of the lien on accounts of taxpayers alleged to be in default of tax payments. The directive was necessitated by a significant number of taxpayers with frozen bank accounts having to regularise their tax positions.
NIGERIA: Court of Appeal rules on taxing of educational institution
The Court of Appeal in its judgement of 11 December 2018 upheld the judgment of the Federal High Court in Best Children International Schools Limited (“BCISL”) vs FIRS that BCISL, not being a company limited by guarantee which is exempt from tax, was liable to companies income tax.
REUNION: Public consultation on corporate income tax rules reform launched
The French Directorate of Tax Legislation (Direction de la législation fiscale) of the Ministry of the Economy and Finances launched a public consultation process in respect of interpretation issues regarding the new rules adopted in the Finance Act for 2019 with respect to,inter alia, new tax-free zones (zones franches d'activité) available in the overseas departments (Guadeloupe, Guyana, Martinique, Mayotte and Réunion).
SIERRA LEONE: Finance Act 2018 assented into law
The Finance Act 2019 was signed into law by the president on 11 January 2019. Significant amendments, effective from 1 January 2019 include the following:
SEYCHELLES: Preferential tax regimes assessed "not harmful"
The Ministry of Finance, Trade, Investment and Economic Planning, on 25 January 2019, announced that Seychelles does meet the requirements of OECD BEPS Action 5 “Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance”, following an assessment of its various preferential tax regimes by the Forum on Harmful Tax Practices.
The Inclusive Framework on BEPS assessed harmful tax practices in 24 jurisdictions on 57 preferential tax regimes and approved its progress report on 24 January 2019. Seychelles was assessed on the following eight preferential regimes:
Seychelles has committed to adhering to international norms and best practices and made some significant amendments to its tax system in order to meet the BEPS Action 5 recommendations, including:
TOGO: Finance Law 2019 published
The Finance Law 2019 was signed by the president and published under Law No. 2018-020 on 20 November 2018. Significant amendments, effective from 1 January 2019, include:
Sources include IBFD’s Tax Research Platform; www.allafrica.com; http://tax-news.com
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