BY Celia Becker
Africa tax in brief
DEMOCRATIC REPUBLIC OF CONGO: Deadline for payment of 2019 second instalment of advance tax set
On 4 November 2019, the Congolese tax administration (Direction générale des impôts) announced that the deadline for payment of the second instalment of advance tax for the financial year 2019 for large taxpayers is 29 November 2019, instead of 30 November 2019.
The second tax instalment is calculated at 40% of the corporate income tax paid in the prior financial year, including any additional related payments established by the tax administration. A taxpayer may utilise a tax credit, which cannot be higher than 20% of the first instalment payable.
Failure to pay the above instalment on the due date is subject to a penalty of 50% of the amount of the tax instalment due.
LESOTHO: Registered taxpayers to complete and submit standardised VAT schedules
On 7 November 2019, the Lesotho Revenue Authority (LRA) issued a public notice informing all VAT-registered taxpayers to complete standardised VAT schedules to be submitted together with their monthly VAT returns. The schedules are intended to speed up the processing and payment of VAT refund claims, and should contain the following information:
- invoice number;
- date of invoice;
- supplier’s name;
- supplier’s VAT number;
- description of goods and services;
- amount excluding VAT; and
- total amount.
Any VAT refund claims submitted without such supporting schedules will be rejected.
LESOTHO: Increase in personal credits effective
On 3 October 2019, the Lesotho Revenue Authority (LRA) issued Legal Notice No. 84 of 2019 providing for an increase in personal credits from LSL7 260 to LSL9 600 with effect from 1 October 2019.
MAURITANIA: Circular on tax doctrine published
On 10 October 2019, the Tax Authority (Direction Générale des Impôts, DGI) published Circular no. 5 on the application of the new Tax Code published on 29 April 2019, covering corporate tax, individual tax, withholding tax, indirect taxes and tax procedures.
MAURITIUS: EU declared Mauritius compliant with commitments on tax cooperation
On 10 October 2019, the Economic Council of the European Union (EU) declared Mauritius to be compliant with all commitments on tax cooperation.
Since 2018, Mauritius has implemented several tax reforms to satisfy the international tax standards of the Organisation for Economic Co-operation and Development (OECD) and the EU, including introducing controlled foreign company (CFC) provisions.
Mauritius is signatory to multilateral instruments (MLIs) with 44 countries and deposited its instrument of ratifications and notifications for the MLIs in respect of those countries on 18 October 2019.
NIGERIA: Additional VAT exempt items published
On 6 November 2019, the Federal Government of Nigeria issued the Value Added Tax Act (Schedule Modification) Order, 2018 containing additional VAT exempt items, including petroleum products such as automotive gas oil (AGO), aviation turbine kerosene (ATK), household kerosene (HHK), locally produced liquefied petroleum gas (LPG) and premium motor spirit (PMS).
The Order, which took effect from 24 December 2018, was published in the official gazette of 8 January 2019.
NIGERIA: Tax administration announces creation of non-resident persons' tax office
On 20 October 2019, The Federal Inland Revenue Service (FIRS) issued a public notice announcing the creation of the Non-Resident Persons' Tax Office (NRPTO) at the International Tax Department of the FIRS' office in Lagos.
The NRPTO is intended to enhance tax certainty, promote voluntary compliance, reduce tax disputes and avoid double taxation relating to non-resident persons that are liable to tax in Nigeria. All non-resident taxpayers (corporates and individuals) will be required, with effect from 1 January 2020, to submit their tax returns, correspondence and enquiries to the NRPTO.
NIGERIA: 2019 Finance Bill passes second reading in parliament
The 2019 Finance Bill passed its Second Reading at the Senate on 6 November 2019. Significant proposed amendments include:
- applying a lower CIT rate of 20% to medium-sized companies with turnover between NGN25-million and NGN100-million, while small businesses with a turnover of less than NGN25-million are to be exempted from companies income tax;
- applying excess dividend only to untaxed distributions other than profits specifically exempted from tax and franked investment income;
- amending the minimum tax provisions to 0.5% of turnover, with only small companies (with a turnover of less than NGN25-million to be exempt;
- allowing insurance companies to carry forward tax losses indefinitely, deduct reserve for unexpired risks on a time apportionment basis;
- abolishing the special minimum tax for insurance companies;
- granting a bonus of 2% of tax payable to medium-sized companies and 1% to large companies for the early payment of companies income tax;
- introducing thin capitalisation requirements of 30% of EBITDA for interest deductibility, with any excess deduction allowed to be carried forward for five years;
- subjecting a deemed tax presence for non-residents with respect to imported technical and management services to a final withholding tax rate of 10%; and
- introducing an annual VAT registration threshold of NGN25-million.
NIGERIA: Tax on dividends paid from tax exempt income
The Lagos Tax Appeal Tribunal, in the recent case of United Capital Asset Management Ltd and United Capital Trustee Ltd v. FIRS ruled on the application of excess dividend tax in terms of section 19 of the Companies Income Tax Act on income derived from government and corporate bonds, which are specifically exempt from income tax by an exemption order issued by the president.
The Tribunal held inter alia that:
- section 19 does not concern itself with the source or origin of the dividend paid, but applies once the dividend declared and paid is greater than total profits; and
- executive orders in the nature of the exemption order cannot override or supersede the provisions of the tax law, including section 19.
RWANDA: New Tax Procedures Act gazetted
The Rwandan Tax Procedures Act, No 26 of 2019 was gazetted and became effective on 10 October 2019.
The Act repeals Law n°25/2005 of 04/12/2005 on Tax Procedures and governs tax procedures in respect of inter alia personal income tax, VAT, property tax, tax on gaming activities and any other tax as may be prescribed by law. The Act, inter alia:
- details the records, books of accounts and other documentation to be kept by a taxpayer;
- requires any person who carries out any taxable activity to issue an invoice generated by an electronic invoicing system certified by the Rwanda Revenue Authority (RRA);
- prescribes procedures and timelines to be followed by the taxpayer and RRA in the case of a tax audit;
- governs the dispute resolution processes available to taxpayers;
- prescribes fixed administrative fines and non-fixed fines for various categories of non-compliance; and
- establishes guidelines for procedures, including mutual agreement and assistance in collection of taxes provided for in double tax agreements and the prevention of tax evasion.
SOUTH SUDAN: 2019/20 Budget presented
South Sudan’s 2019/20 Budget was presented to the National Assembly by the Minister of Finance and Economic Development on 23 July 2019. It also introduced the Finance Bill 2019-20, proposing a number of changes to the Taxation Act, 2009 and the Finance Act, 2018-19.
Significant proposed amendments include:
- changes to the business profits tax rates (previously levied at the rate of 25% on large business enterprises), based on the sector of operations as follows:
- petroleum companies – 30%;
- trading and manufacturing companies – 28%;
- construction companies and hotels – 25%;
- financial institutions, banks and telecommunication companies – 20%; and
- mining companies – 15%;
- repealing the advance payment of income tax on imported goods currently levied at the rate of 2% on imported food items and 4% on all other imported goods;
- for personal income tax purposes:
- increasing the exemption level for personal income tax on wages and increasing the number of income brackets;
- introducing tax on investment income at the rate of 20% for individuals;
- introducing allowable deductions on gross rental income at the standard allowance of 20%, as well as other allowable expenses, such as local council, city rate levies, or interest expenses on mortgages;
- exempting from personal income tax persons residents in countries with which South Sudan has signed a double tax agreement; and
- reducing the withholding tax rate on the supply of goods and services from 20% to 15%;
- introducing sales tax on telecommunication services at the rate of 18%; and
- increasing excise tax on insurance companies from 7% to 10%.
UGANDA: Public notice re registration for digital tax stamps issued
On 7 November 2019, the Uganda Revenue Authority (URA) issued two public notices on the registration for digital tax stamps (DTS) for importers and manufacturers, following the introduction of a digital tracking solution on 1 November 2019.
In terms of the Excise Duty Amendment Act, 2019, importers and manufacturers of gazetted goods are required to register their premises and manufacturers must install relevant equipment at their premises.
Manufacturers that have been advised to install the equipment will be provided with the equipment, which will be installed and maintained by the URA or a contracted agent. No equipment will be installed at the premises of small and medium-sized manufacturers with manual or semi-automated production lines. However, they will be expected to manually affix and activate the DTS.
UGANDA: Tax Clearance Certificates to be issued on transfer of funds outside Uganda
The Commissioner General of the URA issued a directive on 25 October 2019, instructing all commercial banks to enforce compliance with the requirement that a tax clearance certificate is to be submitted before an amount of UGS50-million may be transferred abroad.
On 31 October 2019 the Commissioner General retracted the directive and confirmed that a tax clearance certificate would not be required to transfer any funds from Uganda.
UGANDA: Public notice on VAT on electronic services supplied by non-residents issued
On 24 October 2019, the URA issued a public notice on the procedure for non-resident persons to account for VAT on electronic services supplied in Uganda to non-resident persons.
Non-residents supplying such electronic services in Uganda are required to register online for VAT through the URA web portal and file monthly VAT returns online and make payments of VAT due by the 15th of the following month.
Payments can be made via a bank of choice listed on the URA web portal in cash or by cheque, demand draft, electronic funds transfer, Visa or MasterCard credit card, point of sale and real time gross settlement and swift transfer. Non-residents without a presence in Uganda may appoint a tax representative for purposes of accounting for VAT and making the required payments.
Sources include IBFD’s Tax Research Platform; www.allafrica.com; http://tax-news.com
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