Worldwide: Africa Tax In Brief -16 August 2016

Last Updated: 22 August 2016
Article by Celia Becker

Most Read Contributor in South Africa, September 2016

African Union: Import tax introduced

At its 27th summit recently held in Rwanda, the African Union ("AU") decided to implement an import tax of 0.2% to be charged on all imports of goods (excluding basic necessities) in each member state. It is expected that EUR1-billion will be collected through this tax, making the AU financially autonomous. Morocco, the only African country currently not a member of the AU, is in the process of being reintegrated into the AU.

Angola: Inclusive framework for implementing measures against BEPS joined

Angola joined the inclusive framework for the global implementation of the Organisation for Economic Co-operation and Development's ("OECD's") Base Erosion and Profit Shifting ("BEPS") Project on 7 July 2016.

Cape Verde: 2016 Budget Bill adopted

The National Assembly adopted Budget Bill 2016 (the "Bill") on 27 June 2016. Significant tax amendments include:

  • exemption from social security contributions for employers who provide young workers with their first job, subject to certain conditions being fulfilled;
  • exemption from stamp duty on notarial and private deeds on the transfer of immovable property for two years;
  • exemption from urban real estate tax (Imposto Único sobre o Património) on immovable property for which the ownership is being regularised, for two years from registering the notarial or private deed;
  • exemption from customs duty on the import of specified equipment and materials necessary for the implementation of the digital television project. The import of digital televisions remains subject to excise duty at the rate of 10%;
  • exemption from value-added tax ("VAT") (with effect from 1 January 2016) of waste removal services provided by public or private entities; construction of buildings to be used for administrative services by municipalities and the creation of infrastructure for sporting, cultural or educational activities, community meetings or municipal markets, social housing, roads or streets; and
  • extension of the tourism tax to the entire fiscal year 2016, with retroactive effect as from 1 January 2016.

Democratic Republic of Congo: Refund of input VAT credit resumed

Following the suspension of the refund of input VAT credits on 18 April 2016 due to the decrease in tax revenues resulting from falling commodities prices, the Minister of Finance announced, on 6 July 2016, that the refund of input VAT credits to eligible taxpayers (mainly mining companies) is to be resumed.

Ghana: Supplementary 2016 Budget presented to parliament

The Supplementary 2016 Budget was presented to parliament on 25 July 2016. Significant tax proposals include:

  • gradual removal of temporary taxes such the Fiscal Stabilisation Levy and the Temporary Import Duty; and
  • rationalising and streamlining tax incentives and exemption policies by reviewing the free zones regime, improving the VAT refund and warehousing processes through electronic processes, improving coordination between the Ministry of Finance and the Ghana Investment Promotion Centre and limiting the use of clearing permits at ports.

Lesotho: Planned implementation of electronic tax filing system

The Deputy Commissioner of the Lesotho Revenue Authority announced the planned implementation of an electronic tax filing system ("e-filing system") on 1 July 2016. The e-filing system will be operated concurrently with the existing manual filing system and aims to simplify tax compliance and record-keeping processes. The e-filing system is expected to be fully implemented in the next financial year.

Madagascar: Draft 2016 Amending Finance Law adopted

The Ministry of Finance and Budget published the draft Amending Finance Law 2016, draft No. 024/2016 on 2 July 2016, which is currently under discussion by parliament. Significant proposed tax amendments include:

  • the introduction of a 10% withholding tax on dividends paid to non-resident individuals, companies and any other non-resident legal entities, payable to the tax administration by the resident distributor of the dividends before the 15th day of the month following the date on which the withholding tax arises; and
  • for purposes of presumptive duty, income derived from public contracts subject to VAT under a special regime of withholding tax, according to article 06.02.02 of the General Tax Code, is not to be considered taxable income and is to be deducted when computing the taxable base.

Mauritius: 2016/17 Budget presented

The 2016/2017 Budget was presented on 29 July 2016 and outlines measures to give additional impetus to Mauritius' regional integration strategy with Africa and Asia.

Corporate tax policies remained largely unchanged, but a five-year tax holiday is to be granted to organisations holding a treasury management centre licence, investment banking and corporate advisory licence, asset and fund managers licence or overseas family corporation licence, international law firms with a global legal advisory services licence providing international arbitration services to global business clients and foreign ultra-high net worth individuals investing a minimum of USD25-million in Mauritius.

An eight-year tax holiday is to be introduced for companies holding a global headquarters administration licence (subject to meeting certain employment creation and substance conditions) and industrial fishing companies.

Manufacturers of textile, wearing apparels, ships and boats, computers, pharmaceuticals and film production are to qualify for an increased investment tax credit of 15% per annum (previously 5%) over three years. Such investment credit will also apply in respect of capital investment made by a company in a subsidiary engaged primarily in the setting up and management of an accredited business incubator capped at MUR20-million investment. Unrelieved investment tax credits may be carried forward indefinitely.

Unrelieved income tax losses upon takeover or merger of a manufacturing company may be carried forward where the acquiree company remains in operation as a going concern and the takeover of a company or transfer of undertaking has been deemed to be in the public interest under the Land (Duties and Taxes) Act.

It is proposed that businesses are to contribute at least 50% of their corporate social responsibility ("CSR") fund to a national CSR foundation, which will subsequently increase to 75% in the following year and any unspent balance should be remitted to the foundation. Previously, businesses were free to elect how to utilise their CSR funds according to their preferred areas of priorities.

It is proposed that the full interest relief currently available on secured housing loans contracted on or after 1 July 2006 to first time home buyers, whose total income does not exceed MUR2-million, be extended to all secured housing loans irrespective of the date the loan was contracted and the income limit be increased to MUR4-million.

The annual income exemption threshold for each category of individual taxpayers has been increased by MUR10 000 with effect from 1 July 2016.

The VAT refund scheme for new homeowners on residential buildings or apartments has been amended with new conditions, including increasing the maximum VAT refund that can be claimed from MUR300 000 to MUR500 000, extending the scheme to include the purchase of houses (and not only apartments) from a property developer, increasing the limit on the cost or purchase price from MUR2.5-million to MUR4-million, removing the size restriction and increasing the eligibility threshold for refund from MUR650 000 to MUR2-million per annum.

Non-VAT registered persons are now required to charge VAT on the supply of services in Mauritius by foreign service providers and remit such VAT to the Mauritius Revenue Authority ("MRA"). Details regarding the mechanism for non-VAT registered persons to remit the VAT are not yet available.

Taxpayers having a VAT liability exceeding MUR50 000 will be obliged to effect payment electronically.

To promote responsible gambling:

  • a 2% levy will be charged on net stakes of gambling operators;
  • a 30% tax on winnings for online betting games will be introduced; and
  • betting duty for bookmakers outside racecourse is to be increased from MUR16 000 to MUR30 000 for each race meeting.

A 15% levy is being introduced on pesticides, herbicides and fruit ripeners and a 25% levy on energy inefficient appliances, such as washing machines, lamps etc.

Tax deduction at source will be extended to services provided by accountants and tax advisors and management fees paid to individuals.

The MRA is to collect the pension contributions of the National Pensions Fund and National Savings Fund as well as the training levy on behalf of the Ministry of Social Security, National Solidarity and Reform Institutions.

Contractors tendering for government contracts exceeding MUR5-million are required to submit a tax clearance certificate from the MRA confirming that he/she has filed his/her tax returns and paid his/her tax before allocation of any such contracts.

A time limit of two years is being introduced for submission of amended income tax returns both by individuals and corporates.

Seychelles: Inclusive framework for implementing measures against BEPS joined

Seychelles joined the inclusive framework for the global implementation of the OECD's BEPS Project on 7 July 2016.

Tanzania: Revised procedures for collection of non-tax revenues announced

The Tanzania Revenue Authority ("TRA") released a public notice dated 20 July 2016, announcing that, in line with the directives of the Minister of Finance and Planning, electronic fiscal devices will be used in the collection of government revenue (i.e. non-tax revenues) with immediate effect. In terms of Finance Law 2016, the TRA will assume responsibility for the collection of non-tax revenues, previously levied and collected by government agencies, institutions and other public sector entities on behalf of the government. During the transition period, government agencies and institutions will levy and collect non-tax revenues on behalf of the TRA until the revenue collection process is fully operational.

Tanzania: Clarification issued in regarding VAT on financial services

The TRA issued the following press release clarifying the application of VAT on financial services, as proposed in the 2016/17 Budget:

  • parliament has passed the amendments to the VAT Act 2014 imposing VAT on fee-based financial services by removing these services from the ambit of the exemptions schedule of the VAT Act;
  • with effect from 1 July 2016, fee-based financial services will be subject to VAT at a rate of 18%;
  • VAT will be collected by the bank or financial institution supplying the service and will follow normal rules of VAT accounting as per the VAT Act; and
  • customer deposits are not subject to VAT.

Tanzania: Amendment to due date of VAT submission and payment

Following an amendment by the Finance Act 2016 to section 66 and 67 of the VAT Act 2014, VAT returns and payments are now due on the 20th day of the month following the end of the relevant tax period (instead of the last working day of the month).

The Finance Act is effective from 1 July 2016, meaning that the June 2016 VAT return and VAT payment will be subject to the new deadline (20 July 2016).

Tanzania: Finance Act 2016

Following the 2016 Budget Speech and the issuing of the 2016 Finance Bill 2016 (the "Bill") on 9 and 14 June 2016 respectively, the Finance Act 2016 (the "Act") was assented to on 30 June 2016. The amendments as per the Act are effective from 1 July 2016 and include the following changes to provisions originally proposed by the Bill:

  • The Bill proposed removing the exemption for the disposal of shares listed on the Dar es Salaam Stock Exchange, but this exemption was reinstated by the Act.
  • The Bill proposed an extension to the definition of the term "business" to cover "a transaction resulting into granting of gifts, benefits in cash, kind or any other way as a source of income received by any person", but this proposed extension has been removed by the Act.
  • The Bill proposed an amendment of the definition of the term "debt" for thin capitalisation purposes that would have extended its application to cover non-interest bearing debt. This proposed amendment has now been removed.
  • The Bill originally proposed an increase in the corporate income tax rate for entities engaged in petroleum operations to 35%, but in terms of the Act, the rate is to remain at 30%.
  • Withholding tax continues to apply to payments to resident professional service providers at a rate of 5%; however, the proposed amendment to treat this withholding tax as a final tax has been removed.
  • Following the verdict against the TRA in the Appeal Court Case of Commissioner General, Tanzania Revenue Authority v. Pan African Energy Tanzania Limited, the Bill included a definition of the term "rendering of service" as transmitting or delivering of service in the United Republic of Tanzania irrespective of the place of performance of service to include any payments for services to non-residents in the ambit of withholding tax. In terms of the Bill, this definition was to be included under section 69 (the source rules), but has now been moved to the general definitions (in section 3).
  • The Act reinstates the minimum payment requirement for objections to the higher of one third of the tax assessed (instead of all the tax assessed as proposed in the Bill) or tax not in dispute. However, the requirement to make this deposit within 30 days remains unchanged. Failure to make the tax deposit on objection within 30 days will result in the assessment being treated as final.

Sources include IBFD, IHS,, and other

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.