Member Article

Angola: Amending Budget Law 2016 adopted

On 19 September 2016, the National Assembly adopted the Amending Budget Law 2016. According to official announcements, the Amending Budget Law does not provide any tax amendments.

Burundi: tax register – draft decree adopted

On 21 September 2016, the Council of Ministers adopted a draft decree implementing a tax register for individuals and legal entities that are registered in the Trade and Commerce Register with the aim to reduce the administrative burden and centralise both registers at the Business Promoting Agency.

Upon registration in the Trade and Commerce Register, a taxpayer will automatically be registered in the tax register.

Cape Verde: Budget Law 2016 enacted

On 30 September 2016, the provisions of Budget Law 2016, Law No. 2/IX/2016 (the “law”), were made available to the public. The law applies with retroactive effect as from 1 January 2016 and includes tax amendments with respect to value-added tax (“VAT”), stamp duties, tax incentives granted to entities hiring young employees and implementing digital television services, real estate tax and tourism contributions.

Kenya: Finance Act 2016 enacted

On 13 September 2016, the Finance Act, 2016 (the “Finance Act”) was enacted by parliament. The Finance Act introduces certain new provisions that were not contained in the Finance Bill, 2016 (the “Finance Bill”) and provided clarification on certain aspects of the Finance Bill. Significant amendments (effective from 1 January 2017, unless otherwise indicated) include:

· withholding tax in the gaming industry: winnings payable by both resident and non-resident bookmakers to players will no longer be subject to withholding tax. The legislation that required winnings to be subject to withholding tax was unclear as to how non-resident and resident bookmakers were to comply with the provisions

· real estate industry: a reduced corporation tax rate of 15% (as compared to the 20% proposed by the Finance Bill) will apply where a company constructs at least 400 residential units annually (reduced from 1 000 units, as per the Finance Bill). The reduced tax rate is subject to approval by the Cabinet Secretary responsible for housing. Where a company is engaged in multiple activities, the rate of 15% shall apply proportionately to the extent of the turnover arising from the housing activity

· withholding tax on rental income: payments made in respect of rent, premium or occupation of immovable property to persons who are resident or who have a permanent establishment in Kenya shall be subject to withholding tax at a rate of 10% subject to appointment in writing by the Commissioner

· Tax Procedure Act:

o for the avoidance of doubt and in order to enforce compliance, the Finance Act 2016 clarifies that the definition of a “tax return” under the Income Tax Act includes monthly employer PAYE returns (P10 return). Failure to submit the return online via iTax by the 9th of the month following the payroll month attracts a penalty of 25% of the tax due or KES10 000, whichever is higher

o the Commissioner of the Kenya Revenue Authority (“KRA”) may, subject to certain conditions, and with the approval of the Cabinet Secretary, remit, in whole or in part, any penalty or interest payable by a person

o the application timeline for the refund of overpaid taxes has been increased from one year to five years

o the Commissioner of the KRA is required to respond to taxpayers’ applications for refund within 90 days of receiving the application

o any overpaid tax that KRA does not settle within two years from the date of application for a refund shall attract interest at the rate of 1% per month.

· withholding VAT reinstated: the Finance Act has reinstated the withholding VAT regime that was repealed by the Tax Procedures Act, effective from 19 January 2016.

Nigeria: Penalty and interest waiver introduced

The Federal Inland Revenue Service (“FIRS”) has approved a waiver of penalties and interest accruing during a three-year tax default period from 2013 to 2015 for a 45 day-period, commencing October 2016.

The waiver does not apply to the principal tax liability due and is available to all taxpayers filing to the FIRS who are in default through a formal application process. Such taxpayers are required to present a payment plan in respect of the outstanding principal tax liability acceptable to FIRS and it is expected that the initial payment on account should not be less than 25% of the liability.

Sources include IBFD, IHS, taxnews.com and others.

Celia Becker

Africa regulatory and business intelligence executive

[email protected]

cell: +27 82 886 8744