The Budget

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By Natasha Meintjes

Exciting news for the private sector investing into the rest of Africa, as Mr Gordhan announces that he will simplify rules in order to reduce the time and costs of doing business in Africa. He further stated that Africa is our home and encouraging investment in Africa is mutually beneficial, as it “generates tax revenue; dividends and jobs both abroad as well as in South Africa’.

The tax rate for companies in South Africa has not changed. We have seen with recent budget highlights in other African countries where CIT rates either increased or decreased. Some examples are Congo which reduced its rate from 34% to 33%; DRC reduced from 40% to 35%; Senegal increased from 25% to 30%.

In most other African countries we also have not seen changes in VAT rates, we have however seen VAT being introduced in countries which previously had GST such as DRC which introduced it in 1 January 2012; Seychelles introduced on 1 July 2012 and Swaziland on 1 April 2012.

South Africa introduced the voluntary disclosure programme and now it is permanently available from 1 October 2012. Mauritius also recently introduced a voluntary disclosure programme until June 2012, which has now extended it for a further period from 1 January 2013 to 30 September 2013.

Targeting of non-compliance remains a key focus area for all revenue authorities across Africa. Mr Gordhan commented: “Around the world, taxpayers and their governments are challenging large multinational companies that pay little or no tax in the countries in which they operate”  This is no different in the Africa continent, where we see a lot of focus from revenue authorities to understand the tax base of multi-nationals operating in their countries.

Minister Gordhan further announced plans to introduce a streamlined registration process, "In the near future, SARS will introduce a Single Registration process in which companies are able to register once-off in a simple manner for all tax types and Customs activities."  This will reduce a number of bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in South Africa. A number of countries in Africa have already implemented a once off registration process, where a taxpayer is only required to submit one registration to register for all tax types.  Kenya has introduced the Personal Identification Number (PIN), the tax obligations covered by the PIN would include corporation tax, withholding tax and PAYE. In Senegal an entity will complete one registration with the tax authorities for all tax types, the entity is issued a tax ID number referred to as NINEA.  Other countries with simultaneous registration for CIT & VAT include Nigeria and Cote d'Ivoire. Entities are automatically registered for corporate tax when the entity is registered or incorporated in Namibia. Similarly in Rwanda, companies are automatically issued with their social security number and Tax Identification number that is similar to their company registration number when registering with the registrar of companies at the Rwanda Development Board’s one stop centre.