National Fiscal Stabilisation Levy due

The National Fiscal Stabilisation Levy ("NFSL") Act, 2013 (Act 862) which was gazetted on 15 July 2013, requires certain entities to pay 5% of their profit before tax as a NFSL levy on a quarterly basis.

The first payment of NFSL became due by 30 September 2013.


Potential waiver for handset import tax

In terms of the Customs and Excise (Duties and Other Taxes) Amendment Act, gazetted in September 2013, a 20% import duty is to be levied on telephone sets, including mobile, cellular and satellite phones.

Following widespread criticism from dealers and manufacturers of handsets, the Minister of Communications, Dr Edward Omane Boamah has recently indicated that the Ministry would be ready to discuss the potential waiving of such import duty based on viable proposals from handset dealers and manufacturers.


VAT exemption for fresh milk

Since the implementation of the Kenya VAT Act at the beginning of September, the price of packeted milk has increased significantly.  Traders blame the price increase on the introduction of 16% VAT.

However, the Kenya Revenue Authority has confirmed that packeted fresh milk is exempt from VAT as it is not a "processed item" which would attract VAT.  For purposes of the VAT Act, the term "unprocessed milk", which is exempt from VAT, includes milk that has undergone heat treatment to eradicate harmful bacteria but to which no significant value has been added.

It was also confirmed that "ordinary bread", which is exempt from VAT, is bread that is sold for general consumption including white and brown bread, but does not include crisp and ginger breads primarily used in the catering industry.


Compliance notice to taxpayers

In a press release published by the Ministry of Finance on 20 September 2013, taxpayers not in good standing with the Receiver of Revenue are warned to settle their tax accounts within a period of one month.

Failure to comply with this notice may result in the seizure of goods, recovery of tax from third parties, civil judgment and recovery of outstanding taxes and the appointment of an agent to recover taxes due.

A similar notice was issued in April 2013 and an estimated 3 000 taxpayers that did not settle their tax accounts had their import VAT accounts suspended.  Consequently, VAT payable on imports could not be suspended and became payable at the point of entry before goods were released into the country.


Business license requirements

In a General Public Notice of July 2013 the Ministry of Trade and Industry announced that all business licenses in Tanzania have to be renewed prior to 31 December 2013 in terms of the Business Licensing Act No 25 of 1972.

Businesses not complying with these provisions will be liable for penalties and interest from January 2014.

The annual business license fee introduced in 2011 was not implemented previously due to a lack of efficient collection procedures.  Going forward the business licenses must be renewed on an annual basis.

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