Africa tax in brief

SADC_Member_States_lowresAuthor: Celia Becker (ENSafrica)

ANGOLA: Amendments to Consumption Tax

Presidential Legislative Decree (PLD) No. 5/15 was enacted and entered into force on 21 September 2015. The PLD amends the applicable rates of consumption tax and customs duties applicable on imports and exports. Amendments to the applicable rates and taxable products include:

  • an increase of the maximum rate of consumption tax on imports from 30% to 80%;
  • an increase of the maximum rate of consumption tax on domestic production from 30% to 65%; and
  • an introduction of consumption tax at the rate of 2% or 5% on various petroleum products.

ANGOLA: Collective Investment Schemes legal regime introduced

Presidential Decree No. 4/15, which provides the legal regime applicable to collective investment schemes, was enacted and became effective on 16 September 2015, following Law No. 20/15 of 21 August 2015.

ANGOLA: New Securities Code enacted

On 31 August 2015, Law No. 22/15, which is to govern the legal regime applicable to the derivatives market, was enacted and published in the Official Gazette, repealing the Securities Law previously in force (Law No. 12/05 of 23 September 2005). In terms of the new Law, the Securities Supervision Organisation (Organismo de Superviso do Mercado de Valores Mobilirios) is in charge of monitoring and enforcing the new regime.

KENYA: Finance Act 2015 enacted into law

The Finance Act, 2015 was assented into law on 11 September 2015. Significant amendments include:

  • Clarification that the reduced tax rate of 25% for companies listed on a securities exchange by way of introduction, introduced by the Finance Bill, will apply for a period of five years following the date of such listing.
  • scrapping of the proposed levy / withholding tax of 0.3% on the transaction value of listed securities to be accounted for by stockbrokers which was introduced by the 2015 Finance Bill. There will thus be no capital gains tax on the sale of listed securities;
  • clarification that tax losses may be carried forward for the next nine succeeding years of income from the year the tax loss arises. The tax losses may be extended beyond ten years upon application to the Treasury Cabinet Secretary. An application to the Treasury Cabinet Secretary is also required in respect of the carry-forward of losses incurred in 2010 and prior years;
  • clarification that the wear and tear allowance for petroleum pipelines, introduced by the Finance Act 2014, should be 12.5% and not 37.5%;
  • introduction of an elective simplified tax regime of 10% of the gross rental receipts in respect of residential rental income not exceeding KShs10 million; and
  • retaining the 150% investment deduction allowance granted for investments of KES 200 million or more outside the cities of Nairobi, Mombasa and Kisumu, which was proposed to be abolished by the Finance Bill.

On the same date, the Special Economic Zones Act, 2015 (SEZ Act) was also assented into law. The SEZ Act provides for a general tax exemption for all licensed SEZ enterprises, developers and operators on all taxes and duties payable under the Excise Duty Act, Income Tax Act, East African Community Customs Management Act and the Value Added Tax Act on all SEZ transactions.

Interestingly enough, relevant amendments to the Income Tax Act and VAT Act introduced by the Finance Act 2015 only provides for the following more limited (and contradictory) relief:

  • exemption from VAT in respect of the supply of taxable goods and services to SEZ enterprises, developers and operators licensed under the SEZ Act;
  • a reduced corporate tax rate of 10% for the first 10 years of operation and 15% for the next 10 years for SEZ enterprises, developers and operators;
  • a 10% withholding tax rate for payments for services and interest to non-residents (other than payments for dividends) by SEZ enterprises, developer and operators.

MAURITANIA: Complementary Finance Law 2015 adopted

The Senate approved the draft Complementary Finance Law for 2015 on 6 August 2015. In terms of the Law, the VAT rate applicable to petroleum products is to be increased from 18% to 20%. The standard VAT rate is to remain unchanged at 16%.

SAO TOME & PRINCIPE: Introduction of VAT

The government announced the appointment of an Official Committee for the introduction of VAT into the domestic tax system on 7 September 2015. Members of the Committee include the Ministers of Agriculture, Economy and Finance and technical staff.

The first meeting of the VAT Official Committee served to launch an open technical debate and to start the process of transition from a wide variety of specific indirect taxes to the “quite modern” VAT system. It is intended for the new VAT system to be fully implemented by 2017.

ZIMBABWE: Plans to introduce a Black Economic Empowerment Tax

Youth and Empowerment Minister Patrick Zhuwao told the government’s Herald newspaper on 5 October that he would propose a 10% levy on all foreign-owned firms that had not complied with the local Indigenisation Legislation. The proposed levy is aimed to fund a black economic empowerment (BEE) programme designed to bring the firms under local majority control.

Efforts to introduce such levy in 2012 failed after then finance minister Tendai Biti, of the opposition Movement for Democratic Change party, refused to sanction its implementation.

The opposition MDC party has rejected the proposal as unconstitutional.

Sources include IBFD, IHS and other