AFRICA: Suggested approaches to drafting domestic minimum top-up tax legislation revised by the Africa Tax Administration Forum

On 29 September 2023, the African Tax Administration Forum ("ATAF") released its revised Suggested Approaches to Drafting Domestic Minimum Top-up Tax ("DMTT") Legislation in order to promote fair and effective tax systems across the African continent and in anticipation of countries enacting GloBE rules.

The revisions, which aim to provide tax administrators, policymakers, and stakeholders with an enhanced framework to address contemporary challenges and ensure a fair and efficient taxation environment, provide for:

  • Alignment with international best practices to facilitate harmonisation and coherence in tax rules;
  • Prioritisation of inclusivity through extensive consultations with tax experts, government officials and other stakeholders, aiming to ensure the suggested approaches are well-grounded and practical; and
  • An adaptive position to individual countries' unique needs and contexts.

The ATAF has strongly recommended that African countries immediately enact DMTT rules to protect themselves from losing taxing rights to developed countries on top-up tax arising from their own tax incentives. More than 50 countries have already announced that they will enact GloBE rules in 2024, and many will start collecting top-up tax.

ANGOLA: Debt relief announced to regularise tax and customs debts

The Angolan Tax Authority has announced that taxpayers who settle their tax debts through voluntary payment before 31 December 2023 will benefit from a 50% reduction in fines and a 30% reduction in interest, provided that they voluntarily express their intention to settle their debts to the Tax Administration Services and pay the full amount outstanding within 15 days after the issuance of the settlement note.

The relief is granted under the Exceptional Regime for the Regularization of Tax and Customs Debt and covers all taxes and customs duties levied under the Angolan tax system.

CȏTE D'IVOIRE: Details of deposited reservations and notifications on the Multilateral Convention published

On 27 September 2023, the OECD published the final version of the Côte d'Ivoire's Reservations and Notifications to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS ("MLI"). The country deposited its instrument of ratification on 25 September 2023, and the Convention will enter into force in respect of Côte d'Ivoire on 1 January 2024.

As of this date, Côte d'Ivoire's treaties with Belgium, Canada, France, Portugal, Tunisia, and the United Kingdom will be modified. The extent to which the MLI will modify each of the bilateral tax treaties will depend on the final adoption positions taken by other countries.

On 25 September 2023, Cȏte d'Ivoire became the 85th jurisdiction to deposit its instrument of ratification for the MLI.

ESWATINI: Details of provisional reservations and notifications on the MLI published

Eswatini signed the MLI on 27 September 2023, bringing the total number of signatories to 101. Following this, the Eswatini government released its provisional list of expected Reservations and Notifications, which will be confirmed upon deposit of the instrument of ratification.

DEMOCRATIC REPUBLIC OF THE CONGO: Tax treaty with the United Arab Emirates enters into force

The Democratic Republic of the Congo - United Arab Emirates Income Tax Treaty (2021) entered into force on 24 January 2023 and generally applies from 1 January 2024 for withholding and other taxes.

GUINEA: Finance Bill 2023 adopted by the National Transition Council

On 26 September 2023, the National Transition Council (Conseil National de la Transition; CNT), acting in their capacity as members of the parliament during the current military transition, unanimously adopted the government's proposals in the amending Finance Bill for the 2023 financial year. The amendment will come into effect upon the promulgation of the Finance Bill by the President of the Republic of Guinea.

Significant amendments include an exemption from VAT on the importation of new vehicles, including vehicles used for medical purposes, firefighting, public infrastructure cleaning services, and hearses.

KENYA: Guidelines for tax amnesty on penalties and interest on unpaid taxes issued

On 1 September 2023, the government of Kenya issued, through a public notice, clarifying guidelines on the implementation of the tax amnesty on penalties and interest on unpaid taxes for the period ending 31 December 2022. The tax amnesty was introduced by the Finance Act 2023 and is effective from 1 September 2023 to 30 June 2024.

The guidelines clarify that:

  • The amnesty is only applicable to a person with penalties and interest but without outstanding principal taxes for periods up to 31 December 2022; a person that has principal tax accrued up to 31 December 2022 but pays the outstanding principal tax debt by 30 June 2024; and a person that has principal tax accrued up to 31 December 2022 but pays the outstanding principal tax debt by 30 June 2024;
  • A person that has paid all of the principal taxes due by 31 December 2022 is entitled to an automatic waiver of the penalties and interest for that period and is not required to make an amnesty application;
  • A person that has not paid all of the principal taxes accrued up to 31 December 2022 is required to apply for amnesty with an accompaniment of a payment plan proposal for the outstanding principal taxes;
  • The tax amnesty cover all heads under tax laws, but does not apply to penalties and interests that arose because of tax avoidance; and penalties and interests relating to tax debts accrued for the periods after 31 December 2022; and
  • Application for the amnesty is made via an online system of the Kenya Revenue Authority (KRA).

MAURITIUS: E-invoicing legislation released

Following the 2022 amendment of the VAT Act to provide for an e-invoicing system, the Mauritius Revenue Authority ("MRA") has recently released the regulations in relation to the e-invoicing system and has confirmed that the project will go live in early 2024.

Under the e-invoicing system, all businesses / economic operators will be required to generate invoices, debit notes and credit notes in electronic format through a compliant Electronic Billing System (EBS). Invoices generated will then be sent to the MRA's Invoice Fiscalisation Platform (IFP) for fiscalisation of the transactions.

The system is expected to be rolled out to businesses with a turnover exceeding MUR100-million in early 2024.

NIGERIA: VAT on diesel for to be waived for six months

The federal government of Nigeria has announced in a press statement on 1 October 2023 that the 7.5% VAT on diesel will be waived for a period of six months. This follows the meeting between the federal government and the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) on measures to address the dispute arising from the removal of subsidy on premium motor spirit (PMS).

RWANDA: New Tax Laws gazetted

On 14 September 2023, Rwanda gazetted laws amending various tax laws. Significant amendments include:

Corporate tax

  • Reducing the standard corporate income tax rate from 30% to 28%;
  • Allowing taxpayers required to submit certified financial statements to seek tax administration authorisation for the provisional filing of non-certified financial statements. Taxpayers that receive authorisation remain liable to pay the tax by the due date and are further required to submit to the tax administration their annual tax declaration and certified financial statements within three months from the date of the provisional tax declaration;

Value added tax

  • Defining the term "exported services";
  • Announcing that VAT is to be levied on online supplies;
  • Amending the list of exempt supplies to include the transportation of solid household waste, sanitary pads, processed maize, rice and milk, aircraft, imported electric automotive vehicles, hybrid automotive vehicles, relevant batteries and their electric charging station equipment;
  • Amending the list of zero-rated supplies to include locally assembled electric automotive vehicles, hybrid automotive vehicles, relevant batteries and their electric charging station equipment, and commission fees charged to tourists for all-inclusive tour package booking services;
  • Providing that taxpayers may only qualify for an input tax credit or VAT refund on the condition that the corresponding output VAT was remitted to the tax administration by its supplier; and
  • Reducing the period within which a taxpayer who does not have relevant supporting documentation may claim input VAT from two years to 12 months from the date of the VAT declaration.

Property tax

  • Introducing tax on the sale of immovable property at the following rates:
    • A rate of 2% on the sale value of immovable property used for business purposes if the seller is registered for income tax; and
    • A rate of 2.5% on the sale value of immovable property if the seller is not registered for income tax;
  • Removing the additional tax of 100% on undeveloped land;
  • Reducing the land tax brackets from RWF0-300 to RWF0-80 per square meter of land surface area;
  • Reducing property tax from 1% to 0.5% for residential buildings and from 0.5% to 0.3% for commercial buildings;
  • Reducing the property tax rates to 0.25% and 0.1% for residential buildings with three floors and residential buildings with more than three floors, respectively; and
  • Taxing developed land based on the value of the land instead of a specified amount per square metre.

ZAMBIA: 2024 Budget presented to the National Assembly

On 29 September 2023, the Minister of Finance and National Planning presented the 2024 Budget Statement to the National Assembly. The Budget proposes several tax measures aimed at stimulating investment in various sectors of the economy and spurring economic growth, including:

  • Increasing the tax-free threshold for individual income tax and adjusting the PAYE income tax bands by reducing the top tax rate from 37.5% to 37%.
  • Increasing the tax holidays and incentives for investors in various sectors of the economy, including:
    • introducing a five-year tax holiday on profits for local producers of cotton seed and cotton ginning;
    • introducing a 10-year tax holiday for companies earning profits from spinning of cotton and weaving of thread;
  • Increasing the income tax relief from 14.2% to 20% of the taxable profits for the first five years of operation for businesses in rural areas;
  • Extending accelerated depreciation of up to 100% to developers of multi-facility economic zones (MFEZ) in respect of any new implement, plant or machinery;
  • A proposal to join the Global Forum on Tax Transparency and Exchange of Information for tax purposes, which will facilitate automatic exchange of tax information (AEOI);
  • Introducing a levy on mobile money transactions between individuals at a rate of between ZMW0.08 and ZMW1.80 on the transaction value;
  • Increasing the period in which a business can claim a refund on VAT incurred on eligible goods before the commencement of commercial operations from four years to seven years for hydro-electricity generation;
  • Implementing an electronic invoicing system for VAT purposes in order to prevent the use of fake invoices in VAT refund claims and ensure that only qualifying entities claim refunds;
  • Establishing a legal framework for the taxation of cross-border electronic services; and
  • Introducing a whistleblowers' reward.

These changes will come into effect on 1 January 2024 following approval from the National Assembly and assent by the President of the Republic of Zambia.

ZAMBIA: Exemptions from VAT withholding introduced

The Zambia Revenue Authority ("ZRA") has introduced certain exemptions from the requirement to withhold VAT by VAT withholding agents when making payments.

The withholding VAT regime requires agents appointed by the ZRA to withhold VAT charged by their suppliers and remit the withheld VAT to the ZRA. The ZRA appoints such agents and the current list provided by the ZRA, dated December 2022, includes government agencies, large scale mining and manufacturing companies, and various government ministries.

Effective 1 April 2023, the Commissioner issued the VAT (General) (Amendments) Rules, 2023, which inter alia allows the ZRA to exempt certain goods and services or other determined cases or class of cases from the requirement to withhold VAT. The ZRA has also excluded payments by withholding VAT agents to the following categories of taxpayers:

  • Other withholding VAT agents (with effect from 1 January 2023); and
  • Large and specialised taxpayers, as per the list published on the ZRA website (with effect from 1 August 2023).

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