BY Celia Becker
Africa tax in brief
ETHIOPIA: Bills amending customs and VAT proclamations endorsed by Council of Ministers
On 26 May 2019, the Council of Ministers endorsed a new bill amending Customs Proclamation No. 859/2014, expected to address practical problems and create a conducive business environment.
The Council of Ministers also endorsed a bill amending a number of provisions of Value Added Tax Proclamation No. 285/2002 on 18 May 2019.
ETHIOPIA: Duty exemption on importation of agricultural equipment granted
On 6 May 2019, the Ministry of Finance granted exemption from duties ("duties" denoting customs duties and other taxes levied on imported goods) on the importation of equipment used for agricultural mechanisation, irrigation and animal food processing technologies. Equipment includes, among other things, machinery for threshing, cleaning and sorting seeds, trailers and semi-trailers for agricultural purposes, and tractors and pumps.
The exemption is intended to facilitate the availability, at a lower cost, of agricultural equipment for persons engaged in agricultural activities.
The exemption became effective on 3 May 2019 and will be discontinued after two years.
MAURITIUS: Declaration of company not in operation announced
The Mauritius Revenue Authority issued a Declaration of Company not in operation (IT Form 3E) on 7 May 2019 and directed that companies that have not started business operations or have ceased business and have not derived any income during a tax year are required to submit a declaration for not being in operation within three months from the end of the tax year.
The declaration must be submitted for every tax year that the company does not commence, or has ceased, business operations, but does not apply to companies holding a Global Business Licence under the Financial Services Act or to trusts.
NIGERIA: Public notice on joint tax audits issued
The Federal Inland Revenue Service (“FIRS”) on 9 May 2019 issued a public notice informing taxpayers of the process for joint tax audits of taxpayers' financial and tax records by the FIRS and State Internal Revenue Services (“SIRS”).
In terms of the public notice, a taxpayer interested in taking advantage of the joint tax audit process should apply through the Joint Tax Board or the Office of the Executive Chairman of the FIRS or the Office of the Chairman of the SIRS where the taxpayer's head office is domiciled.
NIGERIA: LIRS public notice on TIN integration published
The Lagos State Internal Revenue Service (“LIRS”) issued a public notice on 4 June 2019 informing taxpayers of its intention to integrate the existing taxpayers identification digit into the nationwide tax identification number (“TIN”) system with the Joint Tax Board requiring compulsory bank verification number validation for all transactions on the LIRS electronic platform, including the registration and creation of payer ID for new taxpayers, payment of taxes and validation of taxpayers’ profile.
SEYCHELLES: Revenue administration (country-by-country reporting) regulations published
The Seychelles Revenue Commission on 21 May 2019 published the Revenue Administration (Country-by-Country Reporting Multinational Enterprise Groups) Regulations, 2019, issued through Statutory Instrument 25 of 2019 and gazetted on 23 April 2019.
In terms of the regulations, the ultimate parent entity of a multinational group that is resident for tax purposes in Seychelles must file a country-by-country report to the Commissioner General of the Seychelles Revenue Commission within 12 months after the tax year ending 31 December 2019, and within 12 months after every subsequent tax year, containing:
- aggregate information relating to the amount of revenue, profit, loss before income tax, income tax paid, income tax accrued, share capital, accumulated earnings, number of employees and tangible assets other than cash or cash equivalents with regard to each jurisdiction in which the MNE group operates; and
- identification of each constituent entity of the MNE group setting out the jurisdiction of tax residence of such constituent entity and where different from such jurisdiction of tax residence, the jurisdiction under the laws of which such constituent entity is organised, as well as the nature of the main business activity or activities of such constituent entity.
UGANDA: Taxes on imports increased
The Uganda Revenue Authority recently circulated a notice stating tax policy changes with respect to customs duties, expected to become effective on 1 July 2019. The changes are aimed at increasing taxes on imports and, thereby, protecting local manufactures and supporting the "buy Uganda build Uganda" project.
The import duties on foodstuffs that can be attained locally, such as potatoes, honey, processed coffee and tea, ginger, frozen meat, onions and butter are to increase from 25% to 60% and the duties on other products manufactured locally to 35%.
UGANDA: Withholding tax on agricultural supplies to be abolished
During a discussion of the 2019 Tax Amendment Bills tabled before parliament, it was proposed that the withholding tax of 1% on payments for agricultural supplies, introduced with effect from 1 July 2018, be abolished for the financial year 2019/2020 in order to limit protect small-scale farmers who represent the largest percentage of the agricultural sector.
UGANDA: Digital tax stamps to be introduced
On 12 April 2019, the Uganda Revenue Authority (“URA”) announced the roll-out of digital tax stamps, aimed at fighting counterfeit products, on a phased basis. Cigarettes and alcoholic beverages will be subject to digital stamping by May 2019 and July 2019 respectively with drinking water and soda to be included in August and September 2019.
Digital tax stamps are effected through the physical stamping of goods and products at the factory level during production, giving real time information to the URA, policy makers and consumers.
ZAMBIA: Comprehensive lists of sales tax exemption updated
On 3 June 2019, the Zambian Revenue Authority published an updated version of the comprehensive lists of inputs proposed for sales tax exemption, which was initially published on 24 May 2019.
The list includes, inter alia:
- capital inputs available to all producers;
- general exemptions available to all consumers, unless specified otherwise, including the export of goods, building supplies, agricultural equipment and accessories, water supply, health and educational services, transportation services, financial and insurance services;
- exemptions available to producers in specified sectors, including accommodation and food services, agriculture, construction, electricity, gas, steam and supply of air conditioning, financial and insurance activities, information and communication, manufacturing and mining and quarrying.
The Zambia Revenue Authority also, on 3 May 2019, published frequently asked questions on sales tax, intended to address taxpayers' concerns.
ZIMBABWE: Income tax (transfer pricing documentation) regulations 2019 issued
The Minister of Finance and Economic Development issued the Income Tax (Transfer Pricing Documentation) Regulations 2019 by Statutory Instrument 109 of 2019 on 10 May 2019. The regulations became effective on the same date and detail documentation to be submitted (in English) within seven days from the date of a written request by the commissioner.
Sources include IBFD’s Tax Research Platform; www.allafrica.com; http://tax-news.com