Africa Tax In Brief

BENIN: Application of 1% stamp duty on specified cash payments clarified

In order to ensure consistent application of the provisions outlined in Article 423 of the General Tax Code, the Director General of Taxes (Direction Générale des Impôts, DGI) has issued Service Note No. 1020 of 04 June 2025, clarifying the application of the 1% stamp duty on specified cash payments as follows:

• The stamp duty applies exclusively to cash payments made by companies for business expenses and charges. Individuals are exempted from this duty;
• The stamp duty is applicable only to the physical handover of banknotes or coins from a debtor to a creditor in satisfaction of all or part of their debt, provided the amount exceeds CFA100 000;
• A direct cash deposit made by a client into the supplier's account or any collection method set up in the supplier's name is not subject to the stamp duty on receipts; and
• Mobile money payments and money transfers are electronic payments and, therefore, excluded from the scope of the stamp duty.

The primary objective of the stamp duty is to encourage the use of banking and digital payment methods for financial transactions, aligning with the need for greater financial formalisation.

GABON: Multilateral Instrument (MLI) and Convention and Protocol on Mutual Administrative Assistance in Tax Matters approved by the Council of Ministers

On 30 May 2025, the Council of Ministers of Gabon approved the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI), as well as the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, as amended by the 2010 protocol.

Gabon submitted its provisional MLI position at the time of signature, listing its reservations and notifications, including four tax treaties that it wishes to be covered by the MLI.

KENYA: 2025/2026 Budget Statement presented to Parliament

The Cabinet Secretary for National Treasury and Economic Planning has presented the Budget statement for the financial year 2025/2026 to the parliament and the public on 12 June 2025. Significant proposed tax amendments include:

• Allowing taxpayers a full cost deduction for low-value items such as implements, utensils, linen, industrial tools and any similar article in the first year of purchase to enable faster recovery of businesses investing in these items;
• Reducing the period for claiming bad debts from three years to two years;
• Clarifying that fringe benefits tax is payable by the employer at the corporate tax rate;
• Providing for tax incentives aimed at attracting investment through the Nairobi International Financial Centre, with the goal of strengthening Kenya's position as a regional financial hub and promoting foreign direct investment;
• Clarifying that the withholding tax applicable on qualifying dividends and interests is a final tax;
• Reducing the rate of tax on digital assets from 3% to 1.5%;
• Clarifying that all gratuity payments, whether in public or private pension schemes, are exempted from tax;
• Requiring all employers to apply all eligible tax reliefs and exemptions when calculating Pay-As-You-Earn (PAYE) taxes for employees;
• Empowering the Commissioner General of the Kenya Revenue Authority to enter into advance pricing agreements with multi-national companies with a permanent establishment in Kenya;
• Clarifying the due date of minimum top-up tax to be the end of the fourth month after the end of the company's accounting period; and
• Requiring the issuance of tax invoices for all suppliers, whether taxable or not.

MAURITIUS: Tax Tribunal upholds arm's length principle for domestic interest-free loans

In the recent case of Manipal Academic Services International Ltd ("MASI") v. Director General, Mauritius Revenue Authority ("MRA") (ARC/IT/412-18) the Mauritius Assessment Review Committee ("ARC") has ruled that interest-free loans between related resident companies must comply with the arm's length principle, affirming the MRA's use of section 75 of the Income Tax Act to impute deemed interest on such transactions. The ARC emphasised that the applies to both domestic and international transactions, rejecting MASI's argument that the provision was limited to cross-border dealings.

MAURITIUS: 2025/26 Budget presented

The Mauritian Prime Minister and Minister of Defence, Finance, and External Affairs presented the 2025-2026 Budget speech on 5 June 2025. Significant proposed amendments include:

Direct taxation

• Introducing a Qualifying Domestic Minimum Top-Up Tax ("QDMTT") with effect from 1 July 2025. The QDMTT will apply to resident subsidiaries and holding companies of multinational groups with global revenue of at least EUR750 million, ensuring a minimum effective tax rate of 15% in Mauritius.
• Introducing, for the next three financial years, a 5% Fair Share Contribution ("FSC") for companies with annual taxable income exceeding MUR24-million (excluding Global Business Companies, companies benefiting from tax holidays and companies deriving exempt income) and individuals with an annual net income exceeding MUR12-million. The FSC shall apply to income earned from 1 July 2025 to 30 June 2028, cannot be offset by tax credits, and would be payable under the Advance Payment System as per the VAT Act.
• Introducing an Alternative Minimum Tax for hotels, insurance companies, companies with real estate activities, financial mediator and telecommunication companies, applicable if their tax payable (after deductions, before credits) is less than 10% of adjusted book profits. In such cases, 10% of adjusted book profits is payable;
• Exempting 80% of income derived by Virtual Asset Service Providers licensed under the Virtual Asset and Initial Token Offering Services Act, 2021, from corporate tax. Qualifying activities include exchange, transfer, safekeeping, and administration of virtual assets;
• Clarifying that the partial exemption on corporate tax shall apply only if the income-generating activity, not the company, meets substance requirements;
• Withdrawing with effect from 5 June 2025, the Smart City Scheme fiscal incentives, except for projects linked to public transport terminals or the National Regeneration Programme. Incentives removed include VAT, customs duty, registration duty, land transfer tax, morcellement fee, and land conversion tax exemptions, as well as the eight-year income tax holiday.
• Granting a 5% Investment Tax Credit ("ITC") over three years for qualifying small businesses or service providers with an annual turnover not exceeding MUR10-million, acquiring new equipment (excluding motor vehicles) under MUR500 000. Unused ITCs may be carried forward for five years.
• Reducing personal income tax rates and bands from 11 to three, with the first MUR500 000 of taxable income taxed at 0%, the next MUR500 000 at 10%, and the remainder at 20%;
• Subjecting the sale of an apartment acquired under the Economic Development Board scheme by a non-citizen to a land transfer fee of 10% of the property's value or 30% on the gain realised from the resale of the property, whichever is higher;

Indirect taxation

• Reducing the mandatory threshold for VAT registration from an annual turnover of MUR6-million to MUR3-million;
• Providing that specified digital or electronic services from foreign suppliers shall be subject to VAT with effect from 1 January 2026;
• Reducing the annual turnover threshold for compulsory registration for e-invoicing from MUR100-million to MUR80-million;
• Clarifying that VAT should be applied if services performed outside Mauritius are utilised within Mauritius;
• Clarifying that the reverse charge on services received from abroad will apply to all VAT-registered persons, including banks;
• Announcing that the VAT Refund Scheme on the construction or purchase of residential property shall cease on 30 June 2025;

Tax administration

• Providing that the Tax Dispute Settlement Scheme (TDSS), offering a 100% waiver of penalties, will be available to taxpayers with cases pending before the Assessment Review Committee, the Supreme Court, or the Privy Council as of 5 June 2025, provided that these cases are withdrawn from the respective institution and the principal tax amount is settled by 31 March 2026;
• Providing that, under the Voluntary Disclosure Settlement Scheme (VDSS), taxpayers who have under-declared or failed to declare income or taxable supplies will be eligible for a 100% waiver of penalties and interest, provided they voluntarily disclose the under-declared amounts to the MRA and make the necessary payments by 31 March 2026. In addition, the Tax Arrears Settlement Scheme (TASS) has been renewed and remains available to taxpayers with outstanding tax debts as of 30 June 2025. Taxpayers are required to register for the scheme by 30 November 2025 and to settle their outstanding tax liabilities by 31 March 2026 in order to qualify for a full waiver of penalties and interest.
• Requiring tax representatives or tax advisors to register with the MRA unless they are members of the Mauritius Institute of Professional Accountants or a law practitioner; and
• Shortening the period during which an assessment can be issued to a taxpayer from three years to two years prior to the current year of assessment.

NIGER: Application of 5% registration duty on purchase orders in ticketing sector clarified

The General Directorate of Taxes has issued a circular supplementing Circulars No. 004 of 24 January 2025 and No. 006 of 3 February 2025 to clarify the extension of the 5% registration duty introduced by Finance Law 2025. The duty applies to purchase orders placed with:

• Travel agencies for Hajj and Umrah services;
• Airlines operating in Niger; and
• Service providers for flight and hotel reservations.

The new circular came into effect on 19 June 2025.

NIGERIA: Tax credit granted to upstream petroleum operators

The President has signed the Upstream Petroleum Operations Cost Efficiency Incentives Order 2025, an Executive Order aimed at promoting cost efficiency in upstream petroleum operations. The Order introduces several incentives, notably a tax credit capped at 20% of an operator's annual tax liability, awarded based on operational efficiency and performance, and defined performance-based tax reliefs for operators that achieve industry-standard cost reductions.

RWANDA: Guidance issued on timelines for implementation of tax measures in newly gazetted Tax Laws

On 3 June 2025, the Ministry of Finance and Economic Planning ("MoFEP"), through an official communication to the Commissioner General of the Rwanda Revenue Authority, issued the following guidelines on the timelines for the implementation of specified taxation measures in the newly gazetted tax Laws:

• VAT, withholding tax, and excise duty on hybrid motor vehicles will be implemented effective from 1 July 2025;
• VAT on the transportation of goods will be implemented effective from 1 July 2025; and
• Excise duty of 15% on the amount or commission charged on financial transactions will be implemented effective from 1 July 2027.

In addition, the MoFEP has clarified that the tax point for withholding tax on winnings for casino gambling activities shifts from the winning point to the cash-out point.

RWANDA: Various new laws gazetted

The Rwandan government has gazetted, among others, the following new laws, which came into effect from 29 May 2025:

• Law No. 014/2025 of 27 May 2025, which introduces a digital service tax and amends Law No. 027/2022 of 20 October 2022 establishing taxes on income (the Income Tax Law);
• Law No. 015/2025 of 27 May 2025 establishing a tourism tax on accommodation, which introduces a tourism levy of 3% of the amount paid or payable on accommodation, excluding VAT; and
• Law No. 009/2025 of 27/05/2025, which amends Law No. 049/2023 of 05/09/2023 establishing VAT, and Law No. 011/2025 of 27/05/2025 establishing the excise duty, reintroducing VAT on mobile telephones.

TANZANIA: Budget 2025 presented to the public

The Minister for Finance and Planning has presented the 2025/26 Budget statement to the public on 12 June 2025. Proposed significant tax amendments include:

Direct taxes

• Imposing an income tax at a rate of 3.5% on income derived from commercial harvesting and sale of forest products;
• Increasing the Alternative Minimum Tax paid by companies incurring losses for three consecutive years from 0.5% to 1% of turnover;
• Introducing the following withholding taxes:
  • 10% on retained earnings that are not reinvested or distributed;
  • 2% on payments arising from the purchase of raw salt from holders of a primary mining license or artisanal miners; and
  • 10% on commission payments derived from sports betting advertisements;
• Increasing the withholding tax rate on:
  • insurance and re-insurance premium payments made to non-resident companies from 5% to 10%; and
  • payments for professional and management services provided in the extractive sector from 5% to 10%;
• Introducing VAT withholding tax at a rate of 3% for designated suppliers;
• Reducing the allowable deduction of accumulated tax losses carried forward by mining, oil, and gas companies from 70% to 60% of taxable income during the applicable carry-forward period;
• Abolishing the income tax exemption granted for the first 10 years to investors registered in Special Economic Zones (EPZ and SEZ) when goods produced and services rendered within these zones are sold in the local market;

Indirect taxes

• Expanding the list of VAT-exempt supplies to include:
  • pesticides;
  • re-insurance transactions between insurance companies and re-insurance companies;
  • newspapers published locally;
  • edible oil produced locally using locally grown seeds for a period of one year;
  • cooking gas tanks and cylinders; and
  • natural gas sold to Compressed Natural Gas stations for motor vehicle use only;
• Including online marketplace platforms and network marketing platforms in the scope of online intermediation services;
• Requiring all VAT-registered businesses to integrate their invoicing systems with the Tanzania Revenue Authority;
• Expanding the scope of financial intermediaries to include non-resident online payment services platforms that use the infrastructure of other service providers; and
• Imposing a reduced VAT rate of 16% on the purchase of business-to-consumer goods where payment is made online and the consumer confirms that the issued payment invoice contains the correct amount of the transaction.

UGANDA: Budget 2025 presented

The Minister of Finance, Planning and Economic Development presented the 2025/26 Budget to the public on 12 June 2025. Significant proposed tax amendments include:

• Approving a three-year tax holiday for start-up businesses established by Ugandan citizens after 1 July 2025;
• Extending the income tax exemption granted to Bujagali Energy Limited for an additional one-year period, ending on 30 June 2026;
• Extending the capital gains tax exemption to transactions where an individual transfers an asset to a company they have established, but also under their control; and
• Repealing stamp duty on mortgages and agreements.

ZIMBABWE: VAT system modernised

The Zimbabwe Revenue Authority (ZIMRA) has introduced the Tax and Revenue Management System (TaRMS) with effect from 1 June 2025, and includes. The system provides for:

• Automated tax data exchange between TaRMS and the Fiscalization Data Management System ("FDMS");
• Automatic input tax schedule generation; and
• Automatic management of credit and debit notes.

Public Notice 30 of 2025, published on 15 May 2025, advises that with effect from 1 June 2025:

• It is mandatory to submit buyer details on fiscal tax invoices, debit, and credit notes to the FDMS. Required details include the buyer's name, address, contact information, taxpayer identification number (TIN), and VAT registration number, where applicable; and
• All VAT-registered operators and taxpayers, including those below the VAT registration threshold of USD25 000, must comply with the fiscalisation regulations and the integration of TaRMS and FDMS

To comply, taxpayers can select methods based on their business needs, such as mobile POS applications, electronic cash registers, or APIs compatible with FDMS for data recording and submission to ZIMRA's servers. Taxpayers must ensure their selected method is upgraded and complies with the Public Notice.

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.