AFRICA: Guinea-Bissau deposits instrument of ratification for African Continental Free Trade Area Agreement

On 27 September 2022, Guinea-Bissau deposited its instrument of ratification for the African Continental Free Trade Area Agreement ("AfCFTA") as the 44th country. The AfCFTA has so far been signed by 54 countries, entered into force on 30 May 2019 and became effective on 1 January 2021.

ANGOLA: Tax treaty with Mauritius published in Mauritius official gazette

The Government of Mauritius on 30 August 2022 published the income tax treaty between Mauritius and Angola in its official gazette.

The treaty will enter into force when it is published in the local government gazette of Angola and the Government of Angola notifies the Government of Mauritius of the completion of the procedures under its local law for the entry into force of the treaty.

CABO VERDE: Import duties and taxes on petroleum products reduced

Cabo Verde reduced the import duty rate on gasoline from 20% to 10%, on oil from 5% to 0% and reduced the special consumption tax (imposto sobre o consumo especial) rate on diesel and gasoline by 10% to the specific price of CVE6 per litre.

The following updated price table for the maximum fuel prices allowed in the country will be in force from 1 October 2022 to 31 December 2022:

  • diesel: CVE165.30 per litre;
  • gasoline: CVE139.20 per litre;
  • oil: CVE174.10 per litre; and
  • marine diesel: CVE131.50 per litre.

DEMOCRATIC REPUBLIC OF THE CONGO ("DRC"): Parafiscal taxation system to be optimised

As part of the third review of the Economic Program agreed with the International Monetary Fund ("IMF"), the Minister of Finance, during the 72nd Council of Ministers held on 7 October 2022, presented a plan to rationalise parafiscal taxation (Plan de rationalisation des charges non fiscales) and announced the first set of measures to be implemented, including suppressing 36 parafiscal taxes, increasing the rate of 23 parafiscal taxes, merging 11 parafiscal taxes and determining terms of reference to issue a General Code of Parafiscal Taxes with the technical support of the IMF.

DRC: Mandatory electronic submission of tax returns resumed

Following the suspension of the mandatory submission of tax returns by electronic means in April 2022, the Congolese Tax Authority (Direction Générale des Impôts, DGI) in official statement No. 01/044/DGI/DG/DGE/DIG/TNM/CK/2022 of 20 September 2022 announced that it has resumed its enforcement for large businesses with effect from 1 October 2022.

GHANA: Tax treaty with Morocco enters Into force

The Ghana – Morocco Income Tax Treaty (2017) entered into force on 18 October 2022 and generally applies from 1 January 2023.

MOZAMBIQUE: Pardon of fines and reduction of interest on social security payments

The recently approved Decree No. 42/2022 of 17 August introduced a pardon of fines and the reduction of interest on late payments to the National Social Security Institute for entities based in the Cabo Delgado province.

The pardon of fines and reduction of interest are granted subject to the payer having submitted all outstanding returns and having made full payment of any outstanding contributions. A total pardon of fines and a 98% reduction in interest on late payment are granted if full payment of the debt is made, whereas a total pardon of fines and a 75% reduction in the interest on late payment are available if the payment of the debt in instalments over a maximum period of 12 months is requested.

The Decree entered into force on 17 August 2022 and is valid for 12 months.

NIGERIA: 2023 Budget proposals presented to the National Assembly

The Federal Government's budget proposals for 2023 were presented by the president at a joint session of the National Assembly on 7 October 2022. The 2023 Budget, themed the "Budget of Fiscal Sustainability and Transition", aims to facilitate macroeconomic stability, human capital development and food security, boost manufacturing performance, improve defence and internal security, improve the business environment and transport infrastructure, ensure energy sufficiency and promote industrialisation focusing on small and medium scale enterprises

The president also announced the preparation of the Finance Bill, 2022 by the Minister of Finance, Budget and National Planning for passage along with the 2023 Appropriation Bill.

NIGERIA: Court of Appeal confirms VAT as the principal tax on goods and services in hotels, restaurants and event centres

The Lagos Court of Appeal recently decided in Federal Inland Revenue Service ("FIRS") and Attorney General of Lagos State & The Registered Trustees of Hotel Owners and Managers Association of Lagos ("RTHMAL") that VAT is the principal tax on consumption of goods and services in Nigeria and that the VAT Act supersedes any similar state law, including the Lagos State Hotel Occupancy and Restaurant Consumption Law.

On 3 October 2019, the Lagos Federal High Court decided in RTHMAL and AGL & the FIRS that Lagos State was the only constitutional and lawful body empowered to assess, impose and collect tax from customers for goods and services consumed in hotels, restaurants and event centres in the state and that relevant provisions of the VAT Act, which sought to impose a tax on customers for goods and services consumed in hotels, restaurants and event centres in Lagos State, were unconstitutional and invalid. The court made an order of perpetual injunction restraining the FIRS from implementing or enforcing the provisions of the VAT Act on customers of hotels, restaurants and event centres in Lagos State.

Dissatisfied with the FHC's judgement, the FIRS filed an appeal with the Court of Appeal, which ruled in its favour.

NIGERIA: Start-up Bill 2021 signed into law by the President

On 19 October 2022, the president signed into law the Nigeria Start-up Bill 2021, which grants tax relief and incentives to labelled start-up companies in Nigeria, including:

  • exemption from corporate income tax or any other taxes on income for four years;
  • additional income tax relief of 5% of taxable profits for a maximum five-year period granted to labelled start-up companies with a minimum of 10 employees, 60% of which have no work experience or are within three years of graduation;
  • investment tax credit equivalent to 30% of the investment in a labelled start-up;
  • personal income tax exemption of 35% granted to employees on their income for a two-year period;
  • exemption from capital gains tax granted to investors for disposal of assets with respect to the labelled start-up; and
  • a 5% final withholding tax on non-resident service providers for technical, consulting, professional or management services.

RWANDA: Draft Tax Procedures Law approved by Cabinet

On 14 October 2022, cabinet approved a draft law on tax procedures which, if enacted by parliament, will repeal the existing Tax Procedures Act, in force since 2019.

RWANDA: Instrument of ratification for the Convention and Protocol on Mutual Administrative Assistance in Tax Matters deposited

Rwanda deposited its instrument of ratification for the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, as amended by the 2010 Protocol, on 29 August 2022.

TANZANIA: Levies on money transfers scrapped

On 20 September 2022, Tanzania's Minister of Finance and Planning announced the abolition of the levy on electronic money transfers ranging from TZS10 to TZS4 000 for most money transfer transactions with effect from 1 October 2022.

The levy is eliminated for transfers from a bank to a mobile money network (and vice-versa), transfers within the same bank, and transfers from one bank to another bank. The levy is also scrapped on cash withdrawals through bank agents and ATMs to the extent the amount withdrawn does not exceed TZS30 000.

The money transfer levy remains applicable only to transfers within mobile money networks, cash withdrawals through bank agents and ATMs in excess of TZS30 000, and cash withdrawals through other channels irrespective of the amount withdrawn. Where still applicable, the levy is capped at TZS2 000 (previously TZS4 000).

UGANDA: Facebook announces that WhatsApp Business services in Uganda are subject to VAT

Following an announcement by the Uganda Revenue Authority ("URA") in July 2022 that it was starting the collection of VAT from non-resident electronic service providers effective 1 July 2022, Facebook (Meta) has issued a notice that, from October 2022, WhatsApp Business services in Uganda are subject to VAT.

The Facebook release explains that VAT will be applied to customers that have not added a tax identification number to their account. For customers that have added a tax identification number to their account, VAT will not be applied and the customer is responsible for self-assessing and paying the VAT due through the reverse charge mechanism.

ZAMBIA: 2023 Budget presented to the National Assembly

On 30 September 2022, the Minister of Finance presented the Budget Statement for 2023, aimed at supporting the recovery of the tourism sector from the adverse effects of the COVID-19 pandemic, reducing the cost of doing business and raising domestic revenues, to the National Assembly. Significant proposals, which will be effective from 1 January 2023 once the relevant bills have been passed by parliament, unless indicated otherwise, include:

Corporate income tax

  • introducing an exempt threshold on turnover tax on rental income tax at ZMW12 000 per annum;
  • extending the turnover tax regime to service providers in the gig economy;
  • reducing the corporate income tax rate from 30% to 25% on income earned from value addition to gemstones through lapidary and jewellery facilities;
  • abolishing the two-tier taxation system in the telecommunication sub-sector to a single tax rate of 35%, previously 30% for profit up to ZMW250 000 and 40% above ZMW250 000;
  • exempting from withholding tax interest income earned on green bonds listed on a securities exchange in Zambia with a maturity of at least three years;
  • repealing the 15% withholding tax on investment income on life insurance funds;
  • reducing the property transfer tax rate from 10% to 7.5% on the transfer of mining rights held by exploration companies;
  • restructuring the taxation of mineral royalties to tax only the incremental value in each price range whenever the price crosses each mineral royalty price threshold;
  • introducing a presumptive tax on income earned from artisanal and small-scale mining, to be based on the gross turnover less mineral royalty paid at the applicable turnover tax rate;
  • reducing tax chargeable on income received by a special purpose vehicle under a public-private partnership for the first five years that a project makes profit by 20%;
  • introducing an accelerated rate of wear and tear allowance on a straight-line basis, not exceeding 100%, in respect of any implement, plant and machinery acquired and used under a public-private partnership project;
  • increasing the threshold for allowable expenditure for the construction of employee housing from ZMW20 000 to ZMW100 000;
  • increasing the farm improvement allowance threshold upwards from ZMW20 000 to ZMW100 000;
  • extending the 2% local content allowance to income earned from value addition to tomatoes;
  • reducing a presumptive tax to 15% from 25% on land-based (brick and mortar) betting companies for the 2023 and 2024 charge years;
  • reducing the tax on winnings from gaming and betting from 20% to 15% for the 2023 and 2024 charge years;
  • abolishing the 20% withholding tax on reinsurance, including retrocession, placed with reinsurers not licenced in Zambia;
  • removing the 15% withholding tax rate on interest earned by individuals from loans advanced to members under the savings groups such as co-operatives and village banking;
  • introducing income tax concessions on income generated from local sales of corn starch by agro-processing businesses operating in a multi-facility economic zone, industrial park or rural area;
  • increasing the property transfer tax rate on the transfer of land, shares and intellectual property from 5% to 7.5%; and
  • exempting the surrender or forfeiture of shares from property transfer tax;

Individual taxation

  • increasing PAYE tax-free threshold from ZMW4 500 to ZMW4 800 per month;
  • adjusting the income tax bands and reducing the tax rate for the second income tax band from 25% to 20%; and
  • increasing the tax credit for persons with disabilities from ZMW500 per month to ZMW600 per month;

VAT

  • zero-rating of the supply of milk cans and milking machines selected information and communications technology and telecommunications equipment;
  • exempting gaming, betting and lotteries and game animals imported as breeding stock from VAT;
  • introducing a standard rate of VAT on selected energy-saving appliances and equipment;
  • removing VAT relief on goods imported by the president which are subject to VAT;
  • exempting from VAT plant, machinery and equipment imported by a special purpose vehicle ("SPV") for projects under public-private partnerships arrangements; and
  • allowing an SPV to claim input VAT before the commencement of commercial operations.

ZAMBIA: Six-month tax amnesty introduced

Effective 1 October 2022, the Minister of Finance granted a tax amnesty on penalties and interest accumulated up to 30 September 2022 covering all tax types. The amnesty will run for a period of six months and provides non-compliant taxpayers with an opportunity to register and regularise their tax affairs with the tax authority.

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