Africa Tax In Brief

AFRICA: Suggested approach to drafting transfer pricing legislation updated by ATAF

The African Tax Administration Forum ("ATAF") on 12 January 2025 released an updated Suggested Approach to Drafting Transfer Pricing Legislation. This revised publication includes new sections covering key issues that have been added to the OECD Transfer Pricing Guidelines and have been identified as areas of increasing importance to Africa.

ANGOLA: State Budget 2025 proposes tax measures

In the 2025 State Budget Law, the following new measures were proposed under the exceptional registration regularisation (Regularização excepcional de cadastro) regime:

• Individual taxpayers who have been registered for more than five years without engaging in any activities during that time will be allowed to update their registration without incurring fines for failure to submit tax declarations; and
• Taxpayers who voluntarily register their properties with the General Tax Administration during the 2025 fiscal year may be exempt from paying property tax (imposto predial) and any associated fines and interest for the tax years from 2019 to 2023, provided that they meet certain requirements outlined in the proposed legislation.

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

In Circular No. 083 of 23 January 2025 the Director General of Taxes has clarified that the 1% stamp duty applicable from 1 January 2025 applies to cash payments exceeding XOF100 000 made by businesses, while payments by private individuals remain exempt.

Businesses receiving payments from other businesses (B2B transactions) are required to withhold and remit stamp duty at a rate of 1% of the total payment received. If a business pays to an individual, the business must reverse-charge and remit the duty on its own behalf. The declaration and payment of stamp duty must be made via the e-services platform under the section "other declarable taxes of the current period" of the platform.

BENIN: Tax rules for civil real estate companies clarified

In Circular No. 033 of 15 January 2025 the General Director of Taxes has clarified the tax regime applicable to non-commercial real estate companies.

The Circular defines a civil real estate company (société civile immobilière) as an entity where one or more individuals or legal persons associate to acquire, manage, administer, and dispose of real estate. The activities of this company may extend to all direct or indirect related financial, securities or real estate transactions, provided that such transactions do not alter the non-commercial nature of the company.

The key tax provisions applicable to civil real estate companies are as follows:

• Income are taxed at partners' level or, by option, at the company level.
  • When natural persons partner in a civil real estate company that has not opted for corporate income tax, the company's income is allocated to each partner based on their shareholding and taxed at the rate of 12% on gross rental income. Withholding tax on rental income (10% on business leases) are also imputable to each partner based on shareholding and creditable against their final income tax.
  • When partners are legal entities, they are subject to rental income tax, and any income attributed to them by the real estate company is exempt from corporate income tax.
  • Both the real estate company and its partners are jointly and severally liable for the payment of income tax.
  • If a real estate company opts to pay corporate income tax, it is exempt from provisional instalments when at least 50% of its turnover is subject to withholding tax on rental income.
• The rental of buildings and sites intended for commercial use is subject to VAT if the registration threshold (F.CFA50-million) is met. A lease of residential buildings is exempt from VAT.
• Real estate companies are subject to business license duty, with the proportional rate calculated based on the rental value of the company's headquarters or offices.

BENIN: 2025 Finance Law promulgated

The President of the Republic of Benin has promulgated the 2025 Finance Law which was adopted by Parliament on 5 December 2024. Significant amendments, which become effective from 1 January 2025, include:

• Extending the waiver of late payment interest for fully paid property tax payments until 31 December 2025;
• Extending the exemption for penalties for taxpayers who voluntarily subscribe for the first time, declaring business carried out in previous years and who fully pay duties due;
• Introducing statistical tax at the rate of 1% of the customs value for non-EU petroleum products under the re-export regime for coal, manganese and other raw materials in transit to non-landlocked countries;
• Extending the VAT exemption of the following items until 31 December 2025:
  • 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) not subject to an exceptional tax regime, on imported materials and equipment used in artisan works and industrial unit construction;
  • imported dialysis kits; and
  • imported herbicides, agricultural machinery and equipment;
• Extending the exemption from VAT and customs duties on:
  • new equipment and materials imported into Benin, as well as local materials, for the construction of service stations, sidewalk stations, oil and diesel tanks until 31 December 2025; and
  • the import and sale of works of art in Benin;
• Allowing soybean producers to export part of the remaining stock free of customs duties and taxes until 31 December 2025;
• Reducing the tax rate on profits from the exclusive trade of works of art to 20% with the minimum tax rate reduced to 0.5% and synthetic tax rate for small traders reduced to 3%;
• Reducing the tax rate on gambling to 15% for casinos; and
• Imposing electronic reporting obligations on digital platform operators.

BENIN: New instructions for issuance of tax certificates issued

The Director-General of Taxes and Revenue has issued Circular No. 2725 of 12 November 2024 requiring the tax administration to collect contributions from the Chamber of Commerce and Industry (CCI) before issuing tax certificates to companies. The CCI contribution is an annual flat-rate fee that all companies established or operating in the Republic of Benin are subject to in furtherance of the operations of the CCI.

BENIN: Appropriate tax treatment for reseller commercial discounts clarified

In Circular No. 2722 of 12 November 2024 the Director General of Taxes has clarified the appropriate tax treatment of commercial discounts granted to resellers. According to the Circular, customers who receive discounts must enter the VAT amount recorded on their credit invoice in the appropriate line "VAT to be returned" on their return form, preceded by a minus sign (-).

If a supplier is required to withhold VAT on discounted goods, the supplier must make similar adjustments by mentioning the deduction made by the supplier on the line "complementary deduction " of the VAT declaration form.

BENIN: Prior approval procedure for NGO VAT exemption amended

In Circular No. 1994 of 16 October 2024 the Director of Taxes requires that, prior to any tax-free purchase of goods or services, non-governmental organizations (NGOs) must, in addition to the previously required documents, provide the Directorate General of Taxes with a copy of the VAT certificate from the supplier or service provider for the billing year. The Circular repeals and replaces Circular No. 1155 issued on 27 June 2024.

BOTSWANA: 2025 Budget speech delivered

Botswana's Minister of Finance delivered the 2025 Budget Speech on 10 February 2025. Proposed tax amendments include:

• Enacting a new Income Tax Act to consolidate and modernise the approach to global business trends and international tax issues;
• Increasing both the corporate tax rate and the top personal income tax rate by 1.5% to 23.5% and 26.5%, respectively;
• Enacting a new Tax Administration Act to harmonise tax rules, reduce compliance time for taxpayers, and eliminate duplications in filing and paying taxes;
• Enacting a new VAT Act to modernise and broaden its scope to encompass modern business practices;
• Introducing VAT on digital trade to broaden the VAT tax base within the rapidly growing digital economy and promote fair taxation by ensuring a level playing field for both traditional and digital businesses, which is anticipated to be completed by September 2025; and
• Developing an Electronic VAT Invoicing Solution to enable real-time tracking of VAT transactions, which is anticipated to be completed by March 2026.

BURKINA FASO: Finance Law 2025 promulgated

Following the adoption of the preliminary draft of the state Budget for the 2025 financial year by the Council of Ministers in November 2024, Finance Law 2025 has been promulgated in February 2025. Significant amendments, effective from 1 January 2025, include:

Direct taxes

• Disallowing as deduction depreciation related to unregistered real estate work contracts;
• Clarifying that the maximum period for paying dividends is deemed to be nine months after the end of the financial year, subject to an extension granted by the competent jurisdiction. The tax on dividends is due within 30 days of this deemed payment;
• Exempting imports and sales of daily bread from withholding tax;
• Expanding the list of taxpayers required to collect withholding tax on payments to resident and non-resident service providers and the withholding tax on property income in Burkina Faso to include cooperative companies, their unions and federations, and other legal entities under the non-determined tax regime;
• Reducing the withholding tax rate on payments to legal entities under the non-determined tax regime from 20% to 5%;
• Scrapping the 20% withholding tax on payments to entities under the non-determined regime and the reduced 5% rate for sums paid to public entities and parastatals;
• Clarifying the rules for calculating business licence duty on articulated vehicles;
• Clarifying that the tax base for registration fees of rental contracts is the rent price for the duration of the contract;
• Introducing a fixed rate registration fee of XOF6 000 on real estate works contracts of at least XOF500-million and related contracts of any amount;
• Increasing the stamp duty on receipts recording cash deposits with banks, financial institutions or securities broker from XOF50 to XOF100; and
• Increasing the stamp duty on fire arm holding authorisations from XOF10 000 to XOF25 000.

Indirect taxes

• Levying VAT on the sale of goods and services in Burkina Faso via foreign or local e-commerce platforms, including commissions received by e-commerce operators in connection with these operations;
• Excluding imported frozen meat from VAT exemption;
• Clarifying that the import of intangible goods is subject to VAT;
• Clarifying that for self-supply, the time of supply is the date of collection or the first use of the goods or services;
• Increasing the number of documents required in support of a VAT refund request by export companies to include a receipt for the payment of VAT input deductions claimed; and a detailed statement of VAT deductions showing the supplier's company name, unique financial identifier number (IFU), invoice references and dates, and the amount of VAT and deductions made; and
• Specifying that VAT on the sale of goods and the provision of services through e-commerce platforms must be collected, declared and remitted by platform operators to the relevant tax department on behalf of suppliers.

Tax administration

• Extending the validity period of tax clearance certificates from one to two months;
• Clarifying that the period to appeal before the General Director of Taxes is 15 days when the relevant authority has not responded after 45 days;
• Imposing a 25% penalty on cash payments exceeding XOF1-million for taxpayers under the synthetic tax regime and the non-determined tax regime;
• Removing the requirement to make a guarantee payment of 25% in the case of an appeal before the court; and
• Exempting telephone companies with an operating licence from the mandatory standardised invoice requirement.

CAMEROON: Requirements for filing local country-by-country declarations specified

Following its introduction in 2024, the government of Cameroon has on 21 January 2025 specified the content, format and procedures for filing local country-by-country declarations under article 18c of the General Tax Code. The declarations are to be filed electronically 12 months following the end of the year under review.

An exemption from filing the declaration is provided for a group of multinational enterprises, whose ultimate parent entity is not resident in Cameroon, which meets the country-by-country reporting threshold of its resident jurisdiction (EUR750-million), even where the threshold (in local currency) of C.FCA492-billion is met.

CAMEROON: New local taxation laws enacted

Law 2024/020 of 23 December 2024, which repeals Law 2009/019 of 15 December 2009, introduces new provisions relating to taxes and duties collected on behalf of local authorities. The implementation date is yet to be determined. Significant amendments include:

• Business licence duty: applies only to taxpayers with annual turnover of at least F.CFA50-million (previously F.CFA15-million). The calculation of the business licence duty has not changed;
• License fees: the scope of license fees, previously applicable only to the production and sale of alcoholic and non-alcoholic drinks, has been broadened to include the production and sale of firearms, ammunition and explosives, as well as gambling and entertainment activities;
• Synthetic tax: the threshold for taxpayers liable for the payment of the synthetic tax (impôt synthetique) has been increased from a turnover of up to F.CFA15-million to a turnover of up to F.CFA50-million; and
• Additional council surcharges: rates have been adjusted to:
  • 10% of the principal amount of VAT, personal income tax and corporate income tax; and
  • 5% of the principal amount of excise duty, the special income tax, and registration fees on public procurement contracts.

CHAD: 2025 Budget 2025 published

Chad has published the 2025 Budget, which enacts various tax changes with effect from 1 January 2025. Significant amendments include:

Value added tax

• Requiring foreign and local e-commerce platforms to collect and remit VAT on sales, services, and goods transacted through these platforms;
• Expanding the list of requirements for businesses to be permitted VAT deductions to include electronically filed VAT annexes (invoices and customs documents), and exemption certificates (if applicable);
• Expanding the list of VAT exempt items to include locally manufactured fired bricks, except for paving stones produced by companies under the standard tax regime;
• Providing that the exemption from withholding tax on VAT on state and public institutions' internal services provision no longer applies to public and semi-public companies;
• Requiring taxpayers to calculate the pro-rated VAT deduction monthly, instead of annually, based on revenue and income generated during the month; and
• Providing that VAT on invoices without a tax identification number (TIN) or issued by taxpayers not listed in the directory of fiscally active TINs is non-deductible, except for invoices from foreign suppliers.

Other taxes

• Establishing the following tax rates for inheritance, donations and gifts: 1% on inheritances, regardless of the relationship between the parties; and 2% on donations and gifts (rates were previously dependent on the degree of relation between the parties);
• Introducing a 10% stamp duty on the amount of money wagered in activities such as games of chance, entertainment and amusement (previously only applicable to racecourse betting); and
• Applying a reduced 5% customs duty to musical instruments, parts and accessories, microphones, and sound recording or reproduction equipment.

CôTE D'IVOIRE: 2025 Budget presented to National Assembly

The Finance Bill 2025 was presented by the Minister of Finance and Budget to the National Assembly during the 2025 National Budget reading on 3 December 2025. Once approved and assented to by the President, the proposed measures which will take effect on 1 January 2025 include:

• Increasing the rate of tax on industrial and commercial profits of companies in the gaming sector from 25% to 30%;
• Imposing a withholding tax on capital gains derived from direct transfers of shares or company shares;
• Extending the scope of advertising tax to include advertising messages disseminated through activities covered by sponsors;
• Increasing the rate of tax on games of chance, casino and slot machines from 5% to 7%;
• Reducing the tax rate on bare urban land from 1.5% to 1%; and
• Increasing the rates of ad-valorem tax on gold by 2%.

DEMOCRATIC REPUBLIC OF THE CONGO: Mining tax rates for 2025 financial year increased

Following a work session between the Mining Cadastre (Cadastre Minier) and the Congolese Central Bank, the government has adjusted the annual mining surface right rates, the mining concession tax rate, and fines through Decision No. CAMI/DG/003/2024 of 16 December 2024. The amendments became effective on 1 January 2025.

DEMOCRATIC REPUBLIC OF THE CONGO: Taxpayer category thresholds updated

In official statement No. 01/291/DGI/DG/DIRAF/DIGR/DIGR/GR/PV/2024 of 17 December 2024 (replacing official statement No. 01/200/DGI/DG/DIRAF/DIGR/DIGR/GR/PV/2021 of 18 November 2021) the DRC tax authority has issued updated thresholds for determining the tax department responsible for administering taxpayers liable to VAT depending on their turnover. The new thresholds are as follows:

• the tax department in charge of large companies (Direction des Grandes Enterprises; DGE) administers taxpayers with an annual turnover, net asset value and payroll exceeding CDF10-billion;
• the tax department in charge of medium-sized companies (Centres des Impots; CDI) administers taxpayers with a turnover between CDF500-million and CDF10-billion; and
• the tax department in charge of micro, small and medium-sized companies (Centres d'Impots Synthetiques; CIS) administers:
  • micro-enterprises with an annual turnover below CDF10-million;
  • small enterprises with an annual turnover between CDF10-million and CDF80-million and
  • medium enterprises with an annual turnover between CDF80-million and CDF500-million.

Newly registered businesses are administered by the CIS pending their assignment to the department to which they belong. Taxpayers liable to VAT with an annual turnover below CDF500-million are administered by CDIs, except where the CIS department already has the capacity to manage VAT.

DEMOCRATIC REPUBLIC OF THE CONGO: MLI Ratification Bill submitted to Parliament for approval

On 22 November 2024, the DRC Minister of Finance submitted a bill to Parliament to ratify the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). The DRC submitted its provisional MLI position at the time of signature, listing its reservations and notifications and including two tax treaties that it wishes to be covered by the MLI.

DEMOCRATIC REPUBLIC OF THE CONGO: Draft Finance Bill 2025 approved by Parliament

On 1 November 2024, Parliament has approved the 2025 Draft Finance Bill, initially presented on 16 September 2024.

ETHIOPIA: New Property Tax Proclamation approved

On 14 January 2025, the Ethiopian Federal Parliament approved Property Tax Proclamation No. 1365/2025, introducing a new taxation system for urban land, buildings, and land improvements and replacing the Urban Land Rent and Urban Houses Tax Proclamation No. 80/1976 and its amendment, Proclamation No. 161/1979. Significant provisions include:

• Imposing property tax on:
  • land use rights acquired on urban land under leasehold tenure;
  • land use rights acquired on urban land through old possessions; and
  • urban land improvements and/or building ownership;
• The taxable value of a property is 25% of its market value, or another percentage to be determined by the Minister of Finance at a later date;
• The Council of Ministers are empowered to determine the minimum and maximum property tax rates based on a study by the Ministry of Finance. Until such rates have been established, the Proclamation sets the following national minimum and maximum rates, subject to specified exemptions:
  • urban land use rights: 0.2%-1% of taxable value; and
  • buildings and land improvements: 0.1%-1% of the taxable value;
• Annual rate increase are capped at 0.5%, excluding adjustments for inflation; and
• Property tax obligations for existing properties take effect immediately upon the enactment on the Proclamation, but the property tax rates will be gradually implemented over four years, starting with the lower rate.

GAMBIA: 2025 Budget approved by the National Assembly

The National Assembly of the Gambia has approved the 2025 National Budget on 16 December 2024. Key tax measures proposed include an increase in the tax-free threshold of personal income tax, higher taxes on pool betting and gaming, and introducing new levies on scrap metals, tobacco, and sugar.

GHANA: Report on review of Ghana's VAT system published

Ghana's Ministry of Finance has published a major new report "A review of Ghana's value-added tax (VAT) system". This report, jointly produced with researchers from the Institute for Fiscal Studies (UK), analyses the design and administration of Ghana's VAT and associated levies. Key findings in the report include:

• That Ghana's VAT system is progressive, with VAT making up a larger share of expenditure for richer households than poorer households, in a large part reflecting exemptions for basic foodstuffs;
• Many businesses below the VAT registration threshold choose to register for VAT, but survey data suggest that there are many businesses above the threshold that should register but do not. A significant share of registered taxpayers also fail to file tax returns or file a 'null' return with zero sales and purchases;
• The restriction of the VAT Flat Rate Scheme (VFRS) – a turnover tax scheme previously available to all wholesalers and retailers – to small taxpayers in 2023 is likely to have both boosted tax revenues and focused the benefits of reduced administration and compliance costs on those who can benefit most from this; and
• The composition of economic growth in Ghana in the second half of the 2010s, led by investment and exports, was not conducive to growth in revenues from VAT – which is a consumption tax. This is likely to be a factor in why VAT revenues did not grow as fast as may have been expected given overall economic growth and increases in tax rates.

The analysis and findings of the report has been fed into tax policymaking in Ghana.

GHANA: International Chamber of Commerce Court of the Arbitration Tribunal rules on branch remittance tax

The International Chamber of Commerce (ICC) Court of the Arbitration Tribunal has issued a ruling in the Tullow Ghana Ltd v. the Republic of Ghana tax arbitration case, stating that branch profits remittance tax (BPRT) is not applicable to Tullow Ghana Ltd as it falls outside the scope of the tax regime provided for in the relevant Petroleum Agreements.

The Petroleum Agreements signed with the Government of Ghana contains stability clauses and tax exemptions, as well as provisions to promote a stable and predictable investment environment in Ghana's oil and gas sector.

An audit by the Ghana Revenue Authority on the fiscal year 2014-2016, resulted in a USD320-million tax assessment relating to the non-payment of BPRT. Tullow Ghana Ltd challenged the assessment by requesting arbitration at the Tribunal in October 2021. It argued that a non-resident person that conducts activities in Ghana through a branch pays BPRT at 8% on earned repatriated profits only in the absence of a relevant stability clause.

The Tribunal held that BPRT is not applicable to Tullow Ghana Ltd under the tax framework stipulated in its Deepwater Tano and West Cape Three Points Petroleum Agreements, which govern operations in the Jubilee and TEN oil fields. The decision sets aside the USD320-million BPRT assessment and exempts the company from any BPRT in the future in respect of its operations under the petroleum agreements.

GUINEA: Effective date of VAT implementation postponed

The replacement of sales tax by VAT was approved by Law No. 4/2022 of 25 February 2022 and due to be implemented with effect from 1 January 2023. However, the implementation was postponed due to technical challenges.

A decision to implement VAT with effect from 1 January 2025 was communicated by the Minister of Finance through an Order No. 130/GMF/2024 dated 31 October 2024, which was issued to the public on 5 November 2024. The Minister of Finance also urged the Directorate-General for Contributions and Taxes (DGCI) to adopt all necessary appropriate measures and administrative acts to ensure a smooth and effective transition to the VAT system.

KENYA: Income Tax (Charitable Organisations and Exemption) Rules implemented

The Kenya Revenue Authority (KRA) has issued a release on the implementation of the Income Tax (Charitable Organisations and Donations Exemption) Rules, 2024, which came into force on 18 June 2024.

The Rules provide guidance on the requirements for exemption from income tax under Paragraph 10 of the First Schedule to the Income Tax Act, as well as the conditions for deductibility of expenditure on donations under Section 15(2)(w) of the Income Tax Act.

KENYA: TAT rules on evidence required to support intra-group service invoices

The Tax Appeals Tribunal (TAT), in the appeal case of O-Play Kenya Limited v. Commissioner of Domestic Taxes (TAT E886 of 2023), has issued a ruling on 17 December 2024 requiring a taxpayer to provide competent and relevant evidence to support the purchase of services from third parties or other group entities under a service pool agreement (SPA), the costs of which are not subject to the 5% mark-up at the point of recharge.

In the case at hand, O-Play Kenya Limited (O-Play), is a Kenyan company involved in marketing, sales and hosting, and formerly in micro-lending and part of the Opera Software group, headquartered in Norway. O-Play's main customer was Opera Norway, a related entity. O-play also provided inter-company services to affiliates of the Opera group, including hosting, internal IT and human resources, and marketing and corporate services which involved the provision of corporate, accounting, payroll, audit, budgeting, tax, legal and other back-office services. It applied a mark-up of 5% on the cost base for the services provided to affiliates of Opera group as per the service pool agreement (SPA) and the OECD Guidelines, and any third-party costs were recharged at cost without a mark-up as outlined in the transfer pricing report.

Following an audit by the KRA of the financial years 2017 to 2021, it inter alia issued a tax assessment in relation to inter-company invoices on the basis that they lacked the 5% mark-up provided for under the Opera Group SPA.

The TAT upheld the assessment on inter-company invoices on the basis that O-Play did not provide competent and relevant evidence to support the purchase of services from third parties or other group entities under the SPA, the costs of which are not subject to the 5% mark-up at the point of recharge.

KENYA: New interest rates for determining tax on fringe benefits, deemed and low interest benefits announced

In a Public Notice issued on 17 January 2025, the KRA as announced the following new interest rates for the determination of tax on fringe benefit, deemed interest and low interest benefits, which apply from 1 January 2025:

• 13% market interest rate to determine fringe benefit tax payable by employers who advance loans to related parties at an interest rate lower than the market interest rate for January to March 2025;
• 13% prescribed interest rate to determine deemed interest which is subject to a withholding tax rate of 15% for January to March 2025; and
• 14% prescribed interest rate to determine low-interest benefit tax payable by individuals who receive loans by virtue of their position or employment including loans from an unregistered pension or provident fund for January to June 2025.

These amendments follow the reduction in the indicative lending rates to 11.25% by the Central Bank of Kenya's Monetary Policy Committee on 5 December 2024.

KENYA: Reintroduction of sugar development levy proposed

The government has proposed, through the Sugar Development Levy Order 2025, published in the Draft Gazette Notice on 8 January 2025, to reintroduce a sugar development levy at a rate of 4% with effect from 1 February 2025 upon its publication in the National Gazette. The levy replaces the 7% levy initially introduced under the repealed Sugar Act 2001, which had remained in force despite the Act's repeal.

The levy is to be applied to both domestically produced and imported sugar as follows:

• for domestically produced sugar, the 4% levy will be calculated based on its value and remitted by millers as agents of the Kenya Sugar Board (KSB); and
• for imported sugar, the 4% levy will be calculated based on its cost, insurance and freight (CIF) value, and collected directly by the KSB or its authorized agents.

All levies collected must be remitted to the KSB by the 10^th day of the month following the month in which they become due.

KENYA: Details of Kenya's deposited reservations and notifications on the Multilateral Instrument (MLI) published

Following Kenya's submission of its provisional MLI position on 26 November 2019, the OECD published the final version of Kenya's Reservations and Notifications on the MLI on 8 January 2025. Kenya deposited its instrument of ratification on the same day. The convention will enter into force in respect of Kenya on 1 May 2025.

As from this date, Kenya's treaties with Canada, Denmark, France, India, Korea (Rep.), Qatar, Seychelles, South Africa, Sweden, the United Arab Emirates and the United Kingdom will be affected by the MLI. This list of affected treaties will increase as further partner countries deposit their instrument of ratification and notification of completion of internal procedures.

KENYA: 2024 Tax Laws Amendment Bills assented to by the government

The government has, through the assented Tax Laws (Amendment) Act 2024 and the Tax Procedures (Amendment) Act 2024, introduced new tax measures which became effective on 27 December 2024. The proposed tax measures include the reintroduction of some of the tax measures that were included in the Finance Act 2024 that was withdrawn. Significant amendments include:

Direct taxes

• Implementing significant economic presence (SEP) tax, chargeable at 30% on taxable profit of non-resident persons whose income from the provision of services is derived from, or accrued in, Kenya through a business carried on through a digital marketplace. The taxable profit is deemed to be 10% of the gross turnover from taxable services. The SEP tax replaces the digital service tax (DST) that was charged at 1.5% of the gross transaction value. The SEP tax does not apply to:
  • a non-resident person who offers the services through a permanent establishment;
  • income of non-resident persons arising from the business of transmitting messages by cable, radio, optical fibre, television broadcasting, very small aperture terminal (VSAT), the internet, satellite or by any other similar method of communication that is chargeable;
  • income subject to withholding tax;
  • a non-resident person providing digital services to an airline in which the government of Kenya has at least 45% shareholding; and
  • a non-resident person with an annual turnover of less than KES5-million.
• Introducing a minimum top-up tax (MTT) of 15% payable in Kenya by a multinational enterprise with a combined effective tax rate of less than 15% and a consolidated annual turnover of EUR750-million (KES100-billion);
• Introducing withholding tax on income derived by a resident and non-resident person owner or operator of a digital marketplace or platform that makes or facilitates payment in respect of digital content monetisation at a rate of 20% for non-resident persons without permanent establishments and 5% for resident persons;
• Introducing withholding tax on payments made for the supply of goods to public entities at a rate of 5% for non-resident persons and 0.5% for resident persons;
• Introducing withholding tax at the rate of 1.5% on the sale of scrap by residents and non-residents;
• Increasing the threshold of benefits granted by employers to employees not subject to tax as follows:
  • meals increased from KES48 000 to KES60 000 per year;
  • non-cash benefits increased from KES36 000 to KES60 000 per year; and
  • gratuity and similar payments increased from KES240 000 to KES360 000 per year;
• Expanding the list of allowable deductions in the computation of taxable income of individuals to include contributions to the Social Health Insurance Fund; affordable housing levy fund; and post-retirement medical fund up to a maximum of KES15 000;
• Increasing the amount deductible in respect of contributions to registered pension or provident funds and registered individual retirement funds or public pension schemes as follows:
  • contributions by an individual: from KES240 000 to KES360 000; and
  • contributions by an employer: from KES20 000 to KES30 000 per month; and
• Exempting from tax income received from pension payments including gratuity, retirement annuity and other payments or withdrawals from a registered pension fund, registered provident fund, public pension scheme or National Social Security Fund.

Indirect taxes

• Expanding the list of VAT exempt supplies to include:
  • the transfer of a business as a going concern;
  • all inputs and raw materials, whether produced locally or imported, supplied to manufacturers of agricultural pest control products;
  • agricultural pest control products;
  • fertilizers and inputs or raw materials locally purchased or imported for manufacturers of fertilizer;
  • materials used in the manufacture of baby diapers, adult diapers, sanitary towels (pads) and tampons;
  • supply of denatured ethanol; and
  • taxable goods imported as raw materials for the manufacture of textile products in Kenya upon recommendation of the cabinet secretary responsible for investment, trade and industry;
• Expanding the application of the East African Customs and Management Act (EACMA) for VAT purpose to exported goods;
• Increasing the rate of the Railway Development Levy from 1.5% to 2.5%; and
• Exempting goods originating from African Continental Free Trade Area from the investment promotion levy.

Tax administration

• Extending the period for tax amnesty on penalties, interests and fines on unpaid taxes from 30 June 2024 to 30 June 2025;
• Providing relief to taxpayers in respect of unpaid taxes where the KRA determines that:
  • it may be difficult or impossible to recover unpaid taxes;
  • it is in public interest not to recover an unpaid tax;
  • there is undue difficulty or expense in the recovery of an unpaid tax;
  • there is hardship or inequity in relation to the recovery of an unpaid tax; or
  • there is any other reason occasioning inability to recover the unpaid tax;
• Clarifying the information that must be included in an electronic tax invoice;
• Imposing a penalty on a withholding tax agent who fails to withhold tax or fails to remit tax at a rate of 10% of the amount not withheld;
• Granting powers to the KRA to require specific taxpayers, excluding business whose turnover exceeds KES5-million, to integrate their electronic tax system with that of KRA for the purposes of submitting electronic documents such as electronic invoices in real time;
• Imposing a monthly penalty of KES100 000 on a person who fails to comply with the requirement of the notice to integrate an electronic tax system for the purposes of submission of electronic documents; and
• Clarifying that the period within which a taxpayer may apply for a refund in case of overpaid taxes other than income tax is 12 months.

KENYA: Tax Appeals Tribunal rules on application of resale price method to purchase of products

In a judgment on 22 November 2024 the Tax Appeals Tribunal (TAT) issued a ruling in the appeal case of Avic International Beijing Limited v. Commissioner of Domestic Taxes (TAT No. E786 of 2023), inter alia rejecting the resale price method (RPM) as the most appropriate method in a controlled transaction of the purchase of products and considered the transactional net margin method (TNMM) as the appropriate method.

In the case at hand, Avic International Beijing (EA) Ltd (Avic) was established in Kenya in 2015, as an approved importer of completely knocked-down kits for the assembly of motor vehicles. Avic used the RPM for arm's length pricing while entering into controlled transactions. These controlled transactions involved the purchase of knocked-down motor vehicle parts from independent manufacturers by Avic (China), which were then sold to Avic without any value addition. Avic assembled these knocked-down motor vehicle parts and designed them into finished products which were sold to willing buyers in the market.

Following an audit by the KRA for the 2016 to 2021 years of assessment, it issued an additional assessment based on transfer pricing adjustments made, using the TNMM as the most appropriate method for determining the gross revenues of Avic.

Avic appealed to the TAT on the basis that:

• The use of the TNMM by the KRA instead of the RPM for transfer pricing purposes resulted in an imaginary and unrealistic additional revenue leading to additional assessments on corporation tax; and
• The RPM was the most appropriate method for transfer pricing under OECD Guidelines given the nature of its transaction.

The TAT found and held that:

• Avic erred in selecting the RPM as the most appropriate transfer pricing method, as the application of the RPM to arrive at an arm's length remuneration would lead to unreliable results;
• Avic made a mistake in the selection of the tested party in the application of the RPM and it did not submit a corrected benchmarking study to the KRA or the TAT for consideration; and
• The KRA's selection of the TNMM as the most appropriate transfer pricing method in the controlled transaction of purchase of products, and selection of Avic as the tested party due to availability of Avic's financial information and conducting the benchmarking analysis to arrive at the arm's length remuneration was the most appropriate.

KENYA: Levy on park entry fees proposed

In an announcement on 27 November 2024 the Cabinet Secretary in charge of National Treasury and Economic Planning has proposed, through the draft Public Finance Management (Wildlife Conservation Trust Fund) Regulations 2024, to introduce a 1% levy on park entry fees to boost wildlife conservation activities across the country. The levy will be charged on revenues realised from fees paid for entrance to parks, reserves, conservancies and sanctuaries.

LIBERIA: VAT at 18% to be introduced in FY2026

The Ministry of Finance and Development Planning plans to introduce VAT at a rate of 18% in the 2026 financial year, replacing the existing goods and services tax currently levied at 10%. This reform is in line with the ECOWAS Protocol on Value Added Tax (VAT) (A/P2/7/96).

Other amendments proposed by the 2025 Budget include increasing the withholding tax on consultancy services from 2% to 10%.

MALI: Tax dispute with Australian Resolute Mining Ltd settled

Australian company Resolute Mining Limited has announced a USD160-million settlement agreement with the Malian government to resolve outstanding tax obligations of uncovered tax arrears totalling approximately CFA100-billion (USD160-million) and tax compliance disputes, and ensure stability for the company's ongoing operations in Mali. The settlement includes an initial payment of USD80-million from Resolute's existing cash reserves, followed by additional payments amounting to USD80-million in the coming months.

The agreement was concluded amidst heightened tensions following the arrest of Resolute's CEO, Terence Holohan, and two other employees in Bamako in November 2024.

MAURITANIA: Tax treaty with Saudi Arabia enters into force

According to Circular No. 6356 of 3 February 2025, released by the Yanbu Chamber of Commerce in Saudi Arabia, the income and capital tax treaty between Mauritania and Saudi Arabia, signed on 2 December 2018, entered into force on 1 January 2025. The treaty will apply from 1 January 2026 for withholding and other taxes.

MAURITIUS: Supreme Court rules on 80% deemed interest deduction

On 31 January 2025, the Supreme Court of Mauritius overturned an Assessment Review Committee (ARC) decision in favor of the Mauritius Revenue Authority (MRA) and ruled that a company is eligible to treat 80% of its interest income as exempt, even though the company's principal activity was the production and sale of electricity, and its interest income was incidental.

The court concluded that:

• The MRA had misinterpreted the relevant requirements and had incorrectly added a condition requiring that the interest income must be derived from the company's core income generation activities; and
• The relevant provisions of the law are clear and unambiguous and that there is no general restriction on the nature of the business activities.

MOZAMBIQUE: Tax proposals announced during President's inauguration speech

The new President of Mozambique, His Excellency Daniel Chapo, has announced several direct tax, indirect tax and tax administrative measures during his inaugural speech on 15 January 2025. Significant proposed amendments include:

• Introducing legislation and structural changes to enable the taxation of digital transactions;
• Simplifying and applying fairness in granting tax exemptions to protect the economy and social sectors;
• Exempting companies involved in road passenger transport from corporate income tax;
• Exempting the importation of buses with more than 30 seats from customs duties and VAT;
• Introducing accelerated depreciation for investments in essential public infrastructure such as water and energy projects; and
• Introducing specific tax packages to encourage local production of materials for the real estate industry;
• Introducing international reference prices when calculating taxes on imports and exports; and
• Strengthening the Mozambique Tax Authority by granting it greater independence and capacity to ensure more efficient tax collection.

NIGER: Finance Act 2025 adopted by government

Various tax measures have been introduced through Finance Act 2025, which was approved and established by Order No. 2024-59 issued on 31 December 2024. Significant amendments, which became effective on 1 January 2025, include:

Direct taxes

• Revising the rates for the minimum lump-sum tax (impôt minimum forfaitaire, IMF):
  • for industrial companies: from 1% to 0.75%;
  • for other activities: from 1.5% to 2.5%;
  • for companies for which the IMF is calculated on the gross margin with the exception of independent marketers and promoters in the hydrocarbons sector: from 3% to 5%; and
  • for marketers and independent promoters in the hydrocarbons sector, from rates ranging from 5% to 8% depending on annual turnover to a fixed tax rate of 15% of the gross margin;
• Expanding the list of tax exempt entities to include:
  • mutualist institutions or savings and credit cooperatives;
  • public non-profit institutions owned by the state or local authorities;
  • local authorities, unions of local authorities, and their non-profit public service agencies;
  • chambers of commerce, industry, crafts, agriculture, and trades, provided they do not engage in commercial activities; and
  • registered charitable entities of Islamic endowment (Waqf) recognised as being of public utility and their beneficiaries;
• Repealing the synthetic tax exemption previously granted to new businesses during the first two fiscal years of operation;
• Repealing exemption from the advance payment of business income tax previously granted to selected taxpayers as well as taxpayers with annual turnover exceeding F.CFA800-million for the previous tax year;
• Increasing the withholding tax rate on payments to non-residents from 16% to 20%. Payments to non-residents for provision of telecommunication services that have already been subject to the tax on international incoming traffic termination are exempted;
• Introducing a tax compliance levy (RCF) on commercial transactions including imports, exports, sales, and services provided by registered taxpayers that are not compliant with their tax obligations and non-registered taxpayers as follows:
  • 10% of the customs value (including duties and taxes) for the import or export of goods;
  • 10% of the price (including all taxes) for payments made for the supply of goods and services;
  • the RCF replaces the fiscal misconduct levy and is deductible for income tax purpose;
• Exempting from the tax on salaries and wages (ITS) income already subjected to impôt sur le revenu des valeurs mobilières (IRVM);
• Introducing IRVM at 15% on income deemed distributed following a tax audit;
• Adjusting the branch tax taxable base from a proportion of the group profit to 75% of the net profit realised in Niger;
• Introducing capital gains tax at a rate of 20% on direct and indirect sale of mining titles, including all transfers of shares of at least 10% in a company holding a mining title issued in Niger. Capital gains derived by the state or its subdivisions are exempted;
• Extending capital gains tax to the transfer free of charge of built or unbuilt property or associated property rights. In addition, the definition of "sales" has been extended to include exchanges, contributions in kind in shared capital, as well as distributions of dividends in kind carried out by allocation of real estate;
• Changing the valuation of the tax base of capital gains tax taking into account the actual value on the date of transfer, replacing the previous method which only considered the sales price;
• Clarifying that the taxable base for the apprenticeship tax is the total remuneration paid in cash, plus the value of benefits in kind granted to employees, estimated as for tax on salaries and wages; revising the list of deduction from the taxable base of apprenticeship tax; and capping such deductions at 50% of the tax base;
• Increasing the rate of rental income taxes:
  • from 10% to 12% of the annual rental value for residential leases; and
  • from 5% to 6% of the annual rental value for free housing and secondary residences;

Indirect taxes

• Introducing VAT on sales of goods and services provided via foreign or local e-commerce platforms (online sales), as well as commissions earned by e-commerce platform operators for facilitating such transactions;
• Exempting operations of registered charitable entities of Islamic endowment (Waqf) from VAT;
• Repealing the restriction on the non-deductibility of VAT on purchases, works, or services exceeding F.CFA3-million paid in cash;
• Introducing a threshold for applying stamp duty on invoices or documents which requires them to have a value of at least F.CFA5 000; and
• Applying fiscal stamp duty of F.CFA100 000 on certificates issued electronically in respect of exemption from withholding tax on VAT; and certificates of periodic validity certificates for exemptions.

Tax administration

• Introducing a requirement for companies whose annual turnover is at least F.CFA500-million to file financial statements, tax documents and income tax returns that are certified and approved by qualified professional accountants authorised by the relevant tax department;
• Introducing a requirement for operators of e-commerce platforms facilitating online supply of goods and services to register with the Directorate General of Taxes (DGT), and declare and pay VAT due on both the supplied goods and services and the commission earned for facilitating such transactions;
• Requiring taxpayers such as public accountants, public bodies and projects who withhold withholding tax, to declare and pay the withheld tax not later than the 15^th day of the month following the month in which they became due;
• Introducing a requirement for taxpayers or their authorised representatives during real estate transactions to obtain a tax clearance certificate from the tax administration to prove that they are compliant with their tax obligations; and
• Establishing an obligation for transferees to withhold and remit the tax on capital gains from the transfer of mining titles within one month of the transfer date when the transferor is a non-resident and within 30 days of the deed for resident transferors.

NIGERIA: Guidelines on Advance Pricing Agreements issued

The Federal Inland Revenue Service (FIRS) as introduced comprehensive Guidelines on Advance Pricing Agreements through Information Circular No. 2024/006, which was published on 27 November 2024. The Guidelines came into effect on 1 January 2025 and provide a structured framework for taxpayers to negotiate predetermined transfer pricing methodologies with the FIRS.

NIGERIA: 4% FOB charge on imports suspended

The Nigeria Customs Service (NCS) has issued a press release on 12 February 2025 suspending the implementation of the 4% free-on-board (FOB) charge on imports, which was implemented in 2024 under the NCS Act 2023. According to the press release, the suspension aims to facilitate stakeholder consultations on the implementation of the NCS Act 2023 and allow the NCS to review its revenue framework.

NIGERIA: 5% tariff increase on services by Nigerian Ports Authority approved

The Federal Government of Nigeria has approved a 15% tariff increase on services provided by the Nigerian Ports Authority (NPA). The NPA stated in a press release that the increase applies to all NPA rates and dues.

NIGERIA: 50% tariff hike for telecommunication operators approved

The Nigerian Communications Commission (NCC) announced on 20 January 2025 that it has approved a 50% tariff hike on telecommunication services. The hike followed pressure on the government by telecommunication operators who had requested a 100% tariff increase on telecommunication services.

RWANDA: Increase in capital gains tax rate proposed

As part of the tax policy reforms approved by Cabinet on 10 February 2025, the Ministry of Finance and Economic Planning on 14 February 2025 has announced a proposal to increase the capital gains tax rate for sales and transfers of shares and other similar instruments from 5% to 10%. This increase is to be effective from the 2025/2026 financial year.

RWANDA: New tax policy reforms announced by Ministry of Finance and Economic Planning

The Ministry of Finance and Economic Planning has announced that certain tax policy reforms have been adopted by Cabinet on 10 February 2025. The reforms, which are to be implemented in the 2024/2025 fiscal year, include:

• Increasing the tax on gross gambling revenue from 13% to 40%;
• Increasing withholding tax on gambling winnings from 15% to 25%;
• Re-introducing VAT on mobile phones and information, communication and technology (ICT) equipment, which have been exempted since 2010 and 2012 respectively. Selected ICT equipment will continue to be exempted in consultation with the Ministry of ICT and Innovation;
• Re-introducing VAT and 5% withholding tax on hybrid vehicles;
• Introducing a tourism levy at 3% on the cost of accommodation;
• Introducing an excise duty of 15% on Cost-Insurance-Freight (CIF) on cosmetics and beauty products, except for critical pharmaceutical beauty products, which will be exempted in consultation with the Ministry of Health; and
• Adjusting the fuel levy from a fixed fee of RWF115 per litre to 15% of CIF to enhance road maintenance.

RWANDA: Tax Treaty with Republic of Korea enters into force

The income tax treaty between Rwanda and the Republic of Korea entered into force on 19 December 2024. The treaty generally applies from 1 January 2025 for withholding and other taxes.

RWANDA: New rates for contribution to mandatory pension scheme introduced

Through Presidential Order No. 086/01 of 12 December 2024, the government of Rwanda has introduced new rates for contribution to the mandatory pension scheme as follows:

• from 1 January 2025: 12% of the employee's remuneration;
• from 1 January 2027: 14%;
• from 1 January 2028: 16%;
• from 1 January 2029: 18%; and
• from 1 January 2030: 20%.

The Presidential Order does not specify whether the above contribution will be split between the employer and the employee, but communication issued by the Rwanda Social Security Board (RSSB) indicates that contributions will be split equally between the employer and the employee.

RWANDA, SENEGAL & UGANDA: OECD peer review reports on Transparency and Exchange of Information released

On 21 November 2024, the Global Forum on Transparency and Exchange of Information for Tax Purposes released peer review reports on transparency and exchange of information on request (EOIR) in respect of . Rwanda, Senegal and Uganda. The reports indicate that:

• Rwanda showed a good base of legal and regulatory framework for ensuring the availability of beneficial ownership and accounting information and will be further assessed in a Phase 2 review, no later than December 2027;
• Senegal maintained its "Largely Compliant" rating, with the report noting that Senegal should still strengthen various areas of its administration and supervision; and
• Uganda maintained its "Largely Compliant" rating as well, but needs to ensure the availability of legal and beneficial ownership, accounting records and banking information and to put in place an effective supervision program.

SEYCHELLES: 2025 Budget Statement presented to National Assembly

Seychelles has presented the 2025 Budget Statement before the National Assembly. Significant proposed amendments, due to take effect from 1 January 2025 once relevant Bills have passed been gazetted, include:

Direct taxes

• Revising the accelerated amortisation period for investments in technology development;
• Introducing a 1.5% tax on assessable income for entities offering virtual asset services;
• Scrapping withholding tax on fees for technical services to boost foreign investments in the digital economy sector for a five-year period;
• Amending the basis of individual taxation by introducing deductions for expenses incurred on children's private schooling; healthcare; additional voluntary pension contributions; interest paid on home and educational loans; and medical or housing insurance;

Indirect taxes

• Introducing a VAT input tax credit schedule for transactions of at least SCR50 000;
• Reviewing the refund procedure to ensure that tax refund claims do not accumulate for more than three months;
• Reviewing the procedure for voluntary registration of businesses;

Tax administration

• Amending transfer pricing rules to introduce transfer pricing schedules, a depreciation schedule, and a schedule for viewing payments made outside Seychelles;
• Clarifying that the tourism marketing tax, VAT, and taxes paid on income and non-monetary benefits are not deductible from business income;
• Amending the timeframe for the submission of objections to decisions on the recovery of accumulated tax debt from 60 days to 90 days;
• Introducing 120 days as the maximum period that Revenue Commission has to resolve an objection; and
• Introducing a requirement for businesses to pay the undisputed portion of tax when raising an objection against an assessment.

SIERRA LEONE: 2025 Budget presented by Finance Minister

Following the delivery of the Budget on 15 November 2024, the Ministry of Finance has published the Budget Speech and Annexes 2025. Significant proposed tax amendments include:

• Extending the minimum alternate tax (MAT) to all sectors, including mining;
• configuring and implementing excise duties on imported goods in the ASYCUDA system, and the MAT in the Integrated Tax Administration System (ITAS);
• Continuing the audits of high-risk taxpayers, including in sectors such as extractives, manufacturing and telecoms; and
• Expanding the tax base through data matching to identify unregistered businesses and under-declared tax revenues.

TOGO: 2025 Draft Finance Bill released

Togo has released the draft Finance Bill for 2025 proposing various tax changes. Significant proposed amendments, which will generally come into effect on 1 January 2025, include:

Direct taxes

• Introducing a minimum lump-sum payment (minimum forfaitaire de perception) based on the profit or turnover of the previous fiscal year;
• Providing that the remuneration of majority shareholders of general partnerships, limited partnerships, limited liability companies and civil companies, and the remuneration of sole shareholders of joint-stock companies will be subject to personal income tax (Impôt sur le revenu des personnes physiques (IRPP)), provided that such remuneration is deductible from profits subject to corporate income tax;
• Introducing corporate income tax on structures operating electronic platform which generate income from Togolese sources;
• Amending withholding tax rates on sums paid as remuneration for the provision of services, non-commercial professions and sums paid to intermediaries in banking transactions, payment and payment services as follows:
  • 3% if the beneficiary provides a tax compliance certificate;
  • 5% if the beneficiary has a tax identification number (TIN); and
  • 20% for others;
• Amending withholding tax rates for advance payments on income tax regarding imports and wholesale purchases of goods as follows:
  • 1% if the beneficiary presents a valid tax registration card;
  • 5% if the beneficiary has a TIN; and
  • 20% for those without a tax compliance certificate or a TIN;
• Exempting newly-established companies from paying the 25% profit cap (deduction threshold) on technical assistance fees and head office expense allocations which are applicable to resident companies in Togo during the first 12 months of operations;
• Requiring debtors to attach an annex when making a payment of withholding tax, detailing information about each supplier that has been subjected to the 20% withholding tax;

Indirect taxes

• Increasing the VAT registration threshold from XOF60-million to XOF100-million for taxpayers engaged in sales or services;

Tax administration

• Requiring taxpayers to provide both electronic and physical copies of their books and documents during a tax audit; and
• Increasing the penalties for failure to regularise provisional returns within the prescribed period from 10% to 30% of the amount due where the situation is regularised within 15 days following the notification of the tax adjustment, and from 30% to 40% where the situation is not regularised within this period.

UGANDA: 2025 Tax Bills 2025 presented

The Income Tax (Amendment) Bill 2025 and Excise Duty (Amendment) Bill 2025 were tabled before Parliament by the Ministry of Finance, Planning and Economic Development on 4 February 2025. The Bills, once approved by Parliament and assented by the President, will be deemed to have come into force on 1 July 2024.

A significant proposed amendment is to extend the tax exemption period for the Bujagali hydro power project for one year from 30 June 2024 to 30 June 2025. The government has been granting a similar exemption to the Bujagali hydro power project since 2018 with the intention to enable the government to lower the end-user electricity tariff and improve competitiveness of locally manufactured products and foster economic development which will be achieved through the impact of lower electricity tariff to the extra-large industrial consumer category.

UGANDA: High Court rules on tax implications of sale of assigned rights in petroleum exploration license

In a judgement issued on 23 December 2024, the High Court of Uganda in the consolidated appeals case of Heritage Oil & Gas Limited V. Uganda Revenue Authority (No. 0023 of 2011 and No. 003 of 2012) ruled that a sale of assigned rights in a petroleum exploration license in respect of an oil exploration area does not amount to the sale of an interest in immovable property for the purposes of assessing capital gains tax.

In the case at hand, Heritage Oil & Gas Limited (Heritage) and Energy Africa (U) Ltd (EAU) entered into production sharing agreements (PSA) with the government of Uganda in relation to exploration areas 1 and 3A in the Albertine Graben, and were accordingly granted licenses for petroleum exploration, development, and production.

EAU later sold its interests to Tullow (U) Ltd (Tullow), pursuant to which, Heritage and Tullow each held 50% equal participation interests in the exploration areas. By way of a joint operating agreement (JOA), Heritage was appointed as the operator for both exploration areas.

In 2010, Tullow exercised its right of pre-emption and acquired from Heritage:

• it's rights under the petroleum exploration licences for exploration areas in the Republic of Uganda;
• it's participating interests under the JOA; and
• it's rights under the PSA, subject to the satisfaction of various conditions which included, among others, obtaining the consent of the Minister for Energy and Mineral Development.

Following the issuing of an initial tax assessment and additional assessment by the Uganda Revenue Authority (URA), Heritage approached the Tax Appeals Tribunal and, subsequently, the High Court. The issues for determination by the Court were inter alia:

• whether the sale of assigned rights in exploration licence amount to the sale of interest in immovable property within the meaning of the Income Tax Act;
• whether the Income Tax Act is applicable to the sale of assigned rights in the exploration licence; and
• whether the exploration cost is an allowable deduction in computation of capital gains tax.

The High Court held that:

• In petroleum activities, exploration Blocks 1 and 3A in the Albertine Graben are not pieces of land, but are created under Petroleum Law for regulatory and administrative purposes. The sale of assigned rights under the petroleum exploration licence does not amount to sale of immovable property for purposes of imposing capital gains tax;
• However, exploration licences that were primarily concerned with exploration operations, which involved surveying, testing and drilling in exploration areas, constitute any other activities carried out by the taxpayer from which it gained taxable income from Uganda and, therefore, are subject to capital gains tax; and
• A seller of an exploration licence is allowed to recognise the exploration expenditure incurred as forming part of the cost base for purposes of capital gains tax. Therefore, the appellant is allowed to deduct the unrecovered exploration expenditure from the consideration received when computing the capital gains tax.

UGANDA: Voluntary disclosure programme for automatic exchange of information purposes implemented

The URA has issued a public notice on 20 December 2024, informing the public that a voluntary disclosure program will be implemented restrospectively with effect from 30 November 2024, in accordance with the Tax Procedures Code Act Cap 342.

The programme provides an opportunity for individuals and entities with undeclared or underdeclared assets or income held in foreign countries to voluntarily declare them to the URA and regularise their tax affairs. Taxpayers voluntarily disclosing such assets or income before 1 September 2025 will benefit from:

• Full waiver of penalties and interest on taxes declared and paid before 1 September 2025;
• Immunity from prosecution for related tax offences on voluntarily declared income or assets;
• Flexible payment terms, including payment in instalments of the assessed tax on voluntarily declared income; and
• Priority treatment by the URA, such as expedited refunds, priority customs clearance and authorized economic operator benefits and withholding tax exemption.

The URA also informed the public that, under the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information and the Convention on Mutual Administrative Assistance in Tax Matters (Implementation) Act 2023, it will be able to receive offshore account information under the automatic exchange of information annually with effect from 1 September 2025.

UGANDA: Tax Appeals Tribunal rules that serviced apartments attract standard VAT rate

In the appeal case of Sharad Karia v. Uganda Revenue Authority (No. 57 of 2023), the Tax Appeals Tribunal (TAT) has ruled on 4 November 2024 that rent collected from the letting or leasing of serviced apartments attracts VAT at the standard rate of 18%.

The TAT found that the leasing or letting of immovable property is normally VAT exempt on the basis that it is a passive activity not generating any significant added value. However, the leasing or letting of the property in question includes the provision of various amenities to tenants, including bed linen; kitchen facilities and utensils; utilities such as electricity, gas, water, cable or satellite television and internet access; laundry facilities; 24-hour dedicated reception services, gym or fitness facilities, swimming pool and other recreational amenities; and housekeeping facilities. This made the properties serviced apartments that generate significant added value and are, therefore, not VAT exempt.

UGANDA: Web-based local excise duty return introduced

Through a public notice dated 7 November 2024 the URA has introduced a web-based local excise duty return, which is required to be used by all taxpayers with effect from 1 November 2024. The new requirement applies to all local excise duty returns of both goods and services commencing with the tax return of November 2024, which were due by 15 December 2024.

UGANDA: AEOI Framework reintroduced

Through a press release dated 22 October 2024, the URA has announced the introduction of the Automatic Exchange of Information (AEOI) framework to key stakeholders within the financial sector.

AEOI is a mechanism designed to prevent cross-border tax evasion by facilitating the exchange of information between tax authorities worldwide. As a signatory to the Common Reporting Standard Convention on Mutual Administrative Assistance in Tax Matters (CRS MCAA), Uganda will share and receive financial account information with other participating countries, enhancing its ability to combat tax evasion and align with international tax compliance standards.

The new AEOI framework is set to enhance Uganda's ability to address tax compliance issues, particularly those related to cross-border transactions. The URA is engaging with stakeholders, including relevant financial institutions and organisations, to ensure full compliance with the new requirements.

ZAMBIA: Mobile Money Transaction Levy Act enacted

The Government of Zambia has enacted the Mobile Money Transaction Levy Act, 2024, which came into effect on 1 January 2025, repealing the Mobile Money Transaction Levy Act of 2023. The new legislation introduces a levy on mobile money transactions and includes provisions for record-keeping, inspections, exemptions and penalties for non-compliance.

ZAMBIA: Zambia becomes a member of the OECD Development Centre

On 9 December 2024, the OECD Development Centre announced the inclusion of Zambia as a member. The Centre will support Zambia in addressing development challenges through comparative analysis of structural trends, governance frameworks and tailored policy experiences aimed at promoting sustainable economic growth and social inclusion.

ZIMBABWE: 2025 Budget presented by the Minister of Finance and Economic Development

The National Budget was presented by the Minister of Finance and Economic Development on 28 November 2025. Proposed measures due to take effect on 1 January 2025, once approved and assented by the President, include:

• Limiting the corporate income tax exemption on the receipts and accruals of building societies;
• Revising personal income tax bands and special economic zones (SEZs) incentives;
• Imposing rental income tax at the rate of 25% on all properties that have been converted from residential to business properties;
• Introducing a fast food tax at 0.5% of the sale value of listed fast-food items to curb the prevalence of obesity and associated non-communicable diseases;
• Introducing a plastic carrier bag tax of 20% on the sale value;
• Designating quarry stones as minerals, which attract a royalty at 0.5%;
• Exempting liquefied petroleum gas for VAT; and
• Requiring any person who supplies, through a tender, taxable goods and services with a minimum value of USD25 000 to provide proof of VAT registration.

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