BENIN: Draft 2025 Finance Bill released
The Beninese Ministry of Economy and Finance has recently released the draft 2025 Finance Bill. Significant proposed tax amendments, which are to become effective on 1 January 2025, include:
- Reducing the business income tax rates from 25% and 30% to 20%; the minimum tax rate from 1% to 0.5%; and the rate of the synthetic business tax (a lump-sum tax paid by small-sized taxpayers) from 5% to 3%;
- Extending the waiver of late payment interest to property tax payments made in full;
- Introducing statistical tax (T.STAT) on petroleum products under the re-export regime for coal, manganese and other raw materials in transit to non-landlocked countries at a rate of 1% of the customs value for non-EU products;
- Imposing electronic reporting on digital platform operators; and
- Extending the exemption from value added tax
("VAT"), customs duty and certain other
taxes on:
- qualifying vehicles and aircraft, including their spare parts;
- containers for compressed or liquefied gas, including their accessories and equipment, imported, manufactured, or sold;
- small and medium-sized entities (SMEs) which are not already subject to an exceptional tax regime, on imported materials and equipment used in artisan works and industrial unit construction;
- imports related to dialysis kits, art production, herbicides, agricultural machinery, processing units, livestock, and fishing equipment;
- production, importation and sale of work of art trading of artworks; and
- importation, production or sale of herbicides, agricultural machinery and equipment, other items and machinery needed for livestock farming, fishing, including their parts and accessories and packages other than cardboard, cans and jute bags.
DEMOCRATIC REPUBLIC OF THE CONGO: Draft Finance Bill 2025 presented to the National Assembly
The draft Finance Bill 2025 was presented to the National Assembly on 16 September 2024. Significant proposed tax amendments, which remain subject to approval, include:
Direct taxes
- Increasing the taxable base of movable capital tax from 40% to 50% of the net income derived by permanent establishments in the DRC of non-resident joint-stock companies and from 50% to 60% of the net income derived by permanent establishments of other companies;
- Introducing a clearer and broader definition of royalties to include payments relating to the right to publicly display a person's portrait; the leasing of advertising space; and the right to lease property owned by the state;
- Enhancing and specifying the conditions under which professional expenses can be deducted from gross income;
- Mandating that income generated from investments made abroad by resident companies, particularly credit and micro-finance establishments, is included in taxable profit;
- Specifying that a 14% withholding tax is due at the time of any payment, including advances or deposits, to non-resident service providers;
- Providing that the sale of top-up credits by telecommunications companies constitutes an "acquired product" and must be included in determining taxable income, even if the credits have not yet been used by the purchasers;
- Amending the current Advance Pricing Agreement ("APA") regime for transfer pricing purposes to expressly require that the pricing policy used in an APA be at an arm's length and introducing a fee of USD10 000 to enter into an APA with the Tax Administration; and
- Various amendments pertaining to the mining, environmental,
hydrocarbons and electricity sectors, including:
- introducing a 5% environmental financial security fee payable by mining rights holders on the application for a certificate of release from environmental obligations;
- introducing a tax, at a rate yet to be determined, on the issuing of forest concessions; and
- providing that electricity sector operators and end-users shall be jointly and severally liable for the levy on electricity consumption by the end-user.
Administrative measures
- Requiring the following documents to be attached to the tax
return:
- a six-column general ledger balance sheet; and
- a statement of asset disposals, detailing information on asset sales during the year;
- Requiring a "standardised" invoice for corporate income tax and VAT transactions;
- Extending the tax administration's right to review carried forward VAT credits beyond the normal period of four years;
- Introducing modernised requirements for reporting amounts paid to third parties, including the obligation to provide statements in digital format;
- Requiring manufacturers, importers, and wholesale or semi-wholesale businesses to submit a list of their customers to the tax administration before 31 March each year;
- Broadening the operations or transactions requiring the
presentation of a valid tax clearance certificate to include:
- the payment of debts between businesses or professionals;
- the granting of credit by banks or financial institutions;
- the opening of bank accounts by non-residents; and
- the subscription for licenses by businesses or professionals;
- Introducing the National Mediation Commission as an independent body with the objective of advising the Minister of Finance in resolving tax disputes before judicial recourse; and
- Establishing a specific profit and income tax payment regime for small businesses in the paid transport sector, requiring equal quarterly payments instead of two semi-annual payments.
ETHIOPIA: New VAT rules for non-resident digital services providers approved
Proclamation No. 1341/2024, implementing VAT on the cross-border provision of digital services, was approved in July 2024 by the House of Peoples' Representatives of Ethiopia. The Council of Ministers is anticipated to release implementing regulations soon.
The draft regulation outlines the definition of remote electronic services and their providers; registration requirements; required documentation; the types of invoices that must be issued; and the tax filing and payment responsibilities of service providers.
KENYA: Supreme Court reinstates Finance Act 2023
On 29 October 2024, the Supreme Court of Kenya in a petition of the Cabinet Secretary for the National Treasury and Planning and four others (Appellants) v. Okiya Omtatah Okoiti and 52 others (No. E031 of 2024), issued a ruling setting aside and overturning the Court of Appeal's decision issued on 31 July 2024 which declared the Finance Act 2023 unconstitutional. The ruling reinstates the Finance Act 2023.
KENYA: Government plans to introduce new tax measures
The government plans to introduce new tax measures through the Tax Laws (Amendment) Bill 2024 and Tax Procedures (Amendment) Bill 2024. The proposed tax measures:
- include some of the tax measures that were included in the withdrawn Finance Act 2024;
- are in response to the submissions received from the public responding to an invitation sent through a public notice on 17 September 2024 by the National Treasury and Economic Planning; and
- were submitted to the National Assembly for publication and consideration by the Cabinet Secretary of National Treasury on 31 October 2024.
KENYA: Income Tax (Financial Derivatives) Regulations 2023 nullified by the High Court
On 11 October 2024, the High Court of Kenya, in judicial review miscellaneous application of Kenya Bankers Association v. State Law and Kenya Revenue Authority ("KRA") and 2 others (HCJRMISC/E043/2023), has issued a judgment nullifying the Income Tax (Financial Derivatives) Regulations 2023.
The Regulations, which were prepared by the National Treasury and Economic Planning in consultation with the KRA, were published in the Gazette on 27 January 2023 and intended to implement a withholding tax regime on financial derivative transactions involving non-residents.
The Kenya Bankers Association ("KBA"), being dissatisfied with the implementation of the Regulations, filed a Miscellaneous Judicial Review application on 18 December 2023 in the High Court, opposing implementation of the Regulations.
The High Court allowed the application and held that the Regulations are ultra vires, null and void and incapable of being implemented. In addition, the Court issued the following orders:
- a certiorari order quashing the Regulations 2023 as contained in Legal Notice No. 4 of 2023 in Kenya Gazette Special Issue Supplement No. 6 of 2023 published on 27 January 2023; and
- a prohibition order directed at the KRA either by itself, its agents or employees, restraining it from taking any steps, actions, or measures to impose or collect any taxes from the members of the applicant engaged in transactions involving financial derivatives and/or enforcement or the Regulations.
KENYA: Artificial Intelligence to be explored to enhance tax administration and address tax evasion
During a three-day KRA Summit 2024 held from 7 to 10 October 2024, the Commissioner General of the KRA has unveiled plans to explore Artificial Intelligence (AI) and other technologies such Application Programming Interfaces (APIs), and Machine Learning to enhance tax administration, improve tax transparency, and address tax evasion.
MALI: 2025 Finance Bill released
Mali has recently released the 2025 Finance Bill. Significant proposed tax amendments include:
- Adopting e-filing and e-payment systems for taxes, duties, and levies, with an extension to mobile services via the GSM network;
- Expanding e-payment options to include proprietary banking solutions and credit card payments, thereby facilitating taxpayer compliance;
- Instituting a levy on overproduction and the imposition of a windfall profits tax targeting companies generating extraordinary earnings;
- Implementing remote audits for tax base assessments and collections through the Standard Integrated Government Tax Administration System ("SIGTAS"); and
- Implementing reforms related to the management of VAT credits to streamline administration and prevent abuse.
NIGER: Cement importation and production to be incentivised through tax reliefs
The Conseil National pour la Sauvegarde de la Patrie ("CNSP") has issued an ordinance establishing a special tax regime in respect of the importation, production, and commercialisation of CEM II 32.5 grey cement in Niger. The following key tax reliefs, which are set for a renewable one-year term, are effective from 14 October 2024:
- exemption from the tax on financial activities ("TAFI") on interest for outstanding loans;
- exemption from VAT on energy sources used for production facilities;
- exemption from the company property tax and the business licence duty;
- exemption from VAT on imports of cement packaging bags;
- exemption from customs duties and other taxes, including VAT, on the import of coal for cement production; and
- exemption from VAT on the sale and transportation of cement for household use.
NIGERIA: Four Tax Reform Bills presented to the National Assembly
The President has submitted the following four bills to the National Assembly to amend tax laws and modernise the legal framework of the Nigerian tax system:
- the Nigeria Tax Bill 2024, which seeks to provide the fiscal framework for taxation in the country;
- the Tax Administration Bill 2024, which seeks to provide a clear and concise legal framework for administering all taxes in the country and reduce disputes;
- the Nigeria Revenue Establishment Bill 2024, which seeks to repeal the Federal Inland Revenue Service Act and establish the Nigeria Revenue Service; and
- the Joint Revenue Board Establishment Bill 2024, which seeks to create a tax tribunal and a tax ombudsman.
The Bills have been sent the House Committee on Finance for consideration.
NIGERIA: Withholding Tax Regulations 2024 gazetted
The federal government has gazetted the Deduction of Tax at Source (Withholding) Regulations 2024 in the official gazette with a commencement date of 1 September 2024. The new Regulations, which shall be effective from 1 January 2025, provide for:
- taxes to be deducted at source;
- persons required to make deductions at source;
- remittance of the amount deducted at source;
- provision of receipt for deductions;
- deductions not as a separate tax or an extra cost; and
- offences, exemptions, and implementation of the regulation.
NIGERIA: VAT (Modification) Order 2024 gazetted
The federal government has published the VAT (Modification) Order 2024 in the official gazette, with a commencement date of 1 September 2024. The Order expanded the list of exempted goods and services as provided for under Part 1 and 11 of the first schedule to the VAT Act to include:
- equipment and infrastructure used for the expansion of compressed natural gas ("CNG") and liquified petroleum gas ("LPG");
- domestic liquefied natural gas ("LNG") processing facilities and equipment;
- electric vehicles and parts for assembling electric vehicles;
- biogas and biofuel equipment and accessories;
- CNG conversion and installation services;
- LPG conversion and installation services; and
- manufacturing, assembly and sale of electric vehicles.
REPUBLIC OF THE CONGO: New sectorial appendices required to be submitted with VAT return
The Directorate General of taxes ("DGI") has informed taxpayers that new sectorial appendices are required to be submitted with VAT returns to detail the taxable operations. The new required appendices, which are effective from 15 November 2024 include:
- Appendices III: Supermarket, Distribution and Food Sector;
- Appendices IV: Hospitality Sector;
- Appendices V: Insurance and Reinsurance Sector;
- Appendices VI: Real Estate Sector;
- Appendices VII: Telecommunication Sector; and
- Appendices VIII: Credit Institution Sector.
SENEGAL: "Senegal 2050" Development Plan anticipated to increase tax burden
On 14 October 2024, Senegal's President revealed a 25-year development plan entitled "Senegal 2050". To fund the Plan, suggestions include broadening the tax base and subjecting additional forms of income to tax. Funding will come from public, private and public-private partnership financing, which is expected to bear an increased tax burden.
UGANDA: High turnover taxpayers required to filed audited financial statements
The Uganda Revenue Authority has issued a public notice announcing that, effective 1 September 2024, a taxpayer with annual turnover of at least UGX500-million (approximately USD136 000) is required to file with his/her/its income tax return audited financial statements prepared by a registered member of the Institute of Certified Public Accountants of Uganda.
This requirement is applicable to both original and amended income tax returns for individuals, partnerships, and entities.
ZAMBIA: 2024-2025 Budget presented to the National Assembly
On 27 September 2024, the Minister of Finance and National Planning presented the 2025 National Budget to the National Assembly. Significant proposed tax amendments, which are expected to be effective from 1 January 2025 when relevant bills have been passed by the National Assembly and assented by the President, include:
Direct taxes
- Increasing the corporate tax rate from 15% to 20% on profits from non-traditional exports and value addition to copper cathodes;
- Introducing an advance income tax at 15% on remittances exceeding USD2 000 or its equivalent, for transactions made without a valid tax clearance certificate and non-compliant exporters;
- Increasing the bands for presumptive tax on operators of motor vehicles for transportation of persons by 20%;
Indirect taxes
- Introducing a selected list of goods on which to apply surtax when imported;
- Revising surtax applied on imported printed paper products and packaging material to 5% and garden hose pipes to 20%, respectively, which are locally manufactured;
Administrative measures
- Permitting the deduction of the skills development levy as a tax-deductible expense in advance of its payment;
- Introducing a provision which enables taxpayers to obtain withholding tax exemption certificates on royalties;
- Broadening the list of transactions where a tax identification number is required to include mobile money and network operators as well as airline operators; and
- Expanding property transfer tax coverage to include regulated lenders outside the Banking and Financial Services Act to base foreclosure property valuations on actual sale price rather than the open market price.
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