South Africa: Africa Tax In Brief - June 2013

Country

Topic

Angola

Plans to simplify taxation

A tax reform project was announced by the Angolan government, aimed at simplifying taxation and limiting the country's reliance on revenue from the petroleum sector.  Angola is Africa's second-biggest oil producer, with 79% of tax revenue in 2011 being earned from oil-industry tariffs.

The project proposes the introduction of three tax codes, which will simplify and modernize outdated tax laws and are expected to increase receipts from manufacturing and retail industries from 8% of Gross Domestic Product (GDP) in 2011 to an estimated 20% of GDP by 2017.

The proposals include replacing the current consumption tax, charged on each stage of manufacturing, by a value-added tax on finished products by 2017.

Kenya

Introduction of mining taxes announced

The African Progress Panel (APP), an influential international policy think tank, has lauded Kenya's decision to tax property transfers in the mining industry.

In an attempt to rid the sector of speculators, Kenya introduced a 20% withholding tax on foreigners and 10% on local companies transferring mining rights.  The taxes are expected to raise an estimated Sh300 billion from individuals who acquire mining licenses for speculation.

The government has also been campaigning to double royalty charges on mines from three to six per cent, while the Environment Ministry gazetted rules requiring 35% local ownership in foreign mining firms.

Kenya

Re-introduction of capital gains tax to be considered

The Parliamentary Budget Office has recommended in its Budget Options 2013/2104 that the Kenya Revenue Authority (KRA) considers the reintroduction of capital gains tax to increase the country's tax base.  The tax was abolished in 1985 to encourage investment in properties and securities, but the KRA is satisfied that those sectors have now grown adequately to justify a reintroduction of the tax.

Currently, only stamp duty is payable on the disposal of properties, while developers and landlords pay income tax when they sell or lease properties. 

The KRA has undertaken to engage participants in the real estate sector and securities market for inputs regarding the scope and rate of the proposed taxation.

Namibia

Tax Amendment Bills offer relief

The National Assembly passed the Stamp Duties, Transfer Duty and Income Tax Amendment Bills on 25 April 2013.  Tax relief measures included in the Bills include:

• Increasing the threshold for the application of stamp duties from transactions below N$400 000 to N$600 000;
• Exemption from transfer duty for transactions under N$600 000; and
• Significant cuts in individual income tax rates.  Persons earning less than N$50 000 per annum will not pay tax, while those earning between N$50 000 and N$100 000 will pay 18% tax.  Currently annual income of less than N$40 000 is not taxable, while those earning between N$40 000 and N$80 000 are taxed at 27%.  The new tax rates apply from the beginning of the financial year on 1 March 2013.

Uganda

Alcohol tax requested to fund HIV/AIDS programs

The Uganda AIDS Commission (UAC) urged the government to expedite a tax on cigarettes, alcohol, bank transactions and mobile phone airtime to fund HIV/AIDS prevention and treatment strategies.

According to the UAC, although annual AIDS-related deaths decreased from over 100 000 in the late 1990's to 60 000 currently, the prevalence of HIV is still on the increase.

HIV/AIDS programs in Uganda are currently largely dependent on donor funding and the UAC is insistent that the country should decrease this dependence to ensure sustainability in the event donors terminate funding.  The proposed taxes are estimated to annually raise USD300 million for HIV campaigns if implemented.