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An update on tax developments throughout Africa
There have been various tax updates to legislation throughout African jurisdictions in recent months. Taxand South Africa highlights a selection of the key measures introduced.
Angola published new transfer pricing documentation rules as part of Presidential Decree 147/13. All taxpayers reporting 2013 revenue in excess of 7 billion kwanzas (approximately USD70 million) are obliged to prepare and submit transfer pricing documentation by 30 June 2014.
The Botswana 2014 Budget was presented to the national assembly on 3 February 2014, announcing that amendments to the Income Tax Act and VAT Act will be presented to parliament during the 2014/15 fiscal year, including a proposed VAT zero rating for farming equipment and basic foodstuffs and increasing the VAT registration threshold from P500 000 to P1 million in order to provide relief to small taxpayers.
Ghana introduced strict new foreign exchange control rules with effect from 5 February 2014. The new provisions include a ban on dollar transactions for purchases and sales within Ghana, the requirement that exporters have to convert their export proceeds into local currency after 30 days and a limit on dollar cash withdrawals of USD10,000. The cedi has weakened significantly following the introduction of the new rules.
The Mozambique Minister of Mines announced in February 2014 that Mozambique is in the final stages of preparing a new fiscal regime for its mining and petroleum sectors, which may include an increase in royalty taxes for coal by the end of the year. Royalty taxes on coal is currently levied at 3%, lower than the 5% for base metals and 10% for diamonds.
The Nigerian Government’s draft budget was presented on 19 December 2013, indicating that the Government will continue to seek to expand non-oil revenue, promote growth in the power, agricultural, sold minerals, health and education sectors and intensify efforts to plug tax loopholes. Expected policy actions include encouraging the local production and assembly of vehicles in Nigeria by levying an import tariff of 70% of the cost of new and used vehicles and providing for a 5 to 10 year tax holiday for local manufacturers of tyres.
Zimbabwean Finance Minister Patrick Chinamasa presented the 2014 Budget to parliament on 19 December 2013. Proposals include a tax deduction in respect of contributions or donations by a taxpayer to a community share ownership trust or scheme in terms of the Indigenisation and Empowerment Act and interest payable by an indigenous person on any loan advanced to purchase shares in terms of an approved indigenisation implementation plan. It is also proposed that amounts received by or accrued to a person form the sale or disposal of shares to an indigenous person or a community share ownership trust or scheme should be exempt from capital gains tax.
Also published in Thomson Reuters Taxnet Pro, 26 February 2014