Most Read Contributor in South Africa, September 2016
ANGOLA: IMF suggests the introduction of VAT
Angola's National Assembly approved the long-awaited non-oil
tax reform on July 4, 2014 and Law No.14/14, which allows the
Government to adopt legislative acts performing additional review
and republication of the Investment Income Tax Code
(Código do Imposto sobre a Aplicação de
Capitais), was enacted and published in the Official Journal
on July 30 2014.
The reform included the adoption of three new laws (the General
Tax Code, the Tax Procedure Code, and the Tax Collection Code) and
a reduction in the corporate income tax rate from 35 to 30
The International Monetary Fund (IMF) welcomed the reform and
further suggested that Angola should introduce a value-added tax
(VAT) to provide more stable revenue for the budget and reduce the
dependency on oil revenue.
ANGOLA: General Tax Administration established
On September 18, 2014 the Economic Commission of the Council of
Ministers approved the establishment of the General Tax
Administration, which will be responsible for the merger between
the National Customs Agency and the National Tax Administration.
The General Tax Administration should ensure greater efficiency in
the collection of taxes by streamlining available resources.
BURUNDI: Amended 2014 Budget Law issued
An amended Budget Law 2014 was issued by the Burundi Government
on August 2, 2014. The Law provides for the introduction of:
a minimum lump-sum tax of 1% of annual turnover applicable to
both residents and non-residents;
an advance payment income tax system at the rate of 3% on the
customs value of imported goods to be sold in Burundi;
a tax of USD0.32 per minute on incoming international telephone
a security tax of 1.15% on the imported value of imported
The Law also repeals the tax credits and VAT exemptions on
importation granted by the Investment Code of 2008 and the Special
Free Zone Regulations.
MALAWI: 2014/15 Budget
The 2014/15 Malawi Budget was presented to Parliament by the
Minister of Finance on September 2, 2014. A significant proposal
was the reduction of the tax rate on mobile phone operators from
33% to 30%.
NIGERIA: Tax deductibility of interest on inter-company loans
A judgment by the Lagos Division of the Nigeria Tax Appeal
Tribunal (TAT) of September 18, 2014 confirmed that interest on
related-party loans incurred by companies carrying out petroleum
operations in Nigeria and assessed under the Petroleum Profits Tax
Act (PPTA) are tax deductible provided that such loan bears a
market-related interest rate.
This follows uncertainty regarding the interpretation of two
contradictory sections in the PPTA, namely section 10(1)(g), which
provides that all sums incurred by way of interest on any
inter-company loans obtained under terms prevailing in the open
market shall be deducted in computing the adjusted profit of the
company and section 13(2) which provides that no deduction shall be
allowed in respect of sums incurred by way of interest during a
period, where the borrowed money was from a company where a direct
or indirect relationship exists between the two companies.
NIGERIA: Judgment on excess dividend tax regime
In terms of section 19 of the Nigerian Companies Income Tax Act
(CITA), Nigerian companies are subject to tax, based on dividends
paid out, where such dividend exceeds the company's taxable
profit in any year of assessment.
An August 2014 judgment by the Lagos Division of the Nigeria TAT
causes uncertainty as to whether dividends paid out of retained
earnings or reserves (which has been taxed previously) will still
be regarded as profits on which no tax is payable and therefore be
subject to the provisions of section 19 of the CITA.
RWANDA: Potential tax breaks announced
Clare Akamanzi, chief operating officer of the state-run Rwanda
Development Board, on October 1, 2014 announced that Rwanda expects
to have a new Investment Code at the beginning of 2015 that could
offer incentives such as seven-year tax holidays for large-scale
investments.It is expected that the new Code will be passed by the
end of 2014 to be effective from the beginning of 2015.
It is also proposed to reduce the current corporate income tax
rate of 30 percent with up to half for sectors of strategic
importance to the economy such as infrastructure projects, energy,
financial services, communications, technology and logistics.
Exporters apart from those of coffee, tea and minerals will also
qualify for the new Code's tax benefits provided they export
more than half the goods they produce.
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The expansion of the West African regional market to foreign investors, and the search for emerging markets has led to a continuous increase in business mobility and cross border investments with Nigeria.
Effective collaboration amongst government agencies, automation of processes and capacity building by tax authorities have always been identified by stakeholders as strategies for achieving an efficient tax system.
The major objective of the waiver is to promote voluntary compliance and consequently generate revenue for government which otherwise, could have been lost.
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