JANUARY 2023 – AFRICA
RECENT LEGISLATION CHANGES
It is important that employers note the following:
Social security contributions
In January 2020 the government of Egypt announced that the monthly social security minimum and maximum contribution base amounts will increase annually until the 2027 tax year.
For the tax year commencing on 1 January 2023, the minimum social security contribution base will increase from EGP 1,400 to EGP 1,700 per month, and the maximum contribution base will increase from EGP 9,400 to EGP 10,900 per month.
Please note the minimum and maximum limits are being approximated to the nearest hundred pounds.
The National Tripartite Committee (NTC) has increased the national daily minimum wage (NDMW) to GHS14.88 for 2023, which is a 10% increase on the 2022 figure of GHS13.53.
This is in addition to a cost-of-living allowance (COLA) of 15% over the 2023 national daily minimum wage.
To read more, follow the link.
The Social Security and National Insurance Trust (SSNIT), together with the National Pension Authority (NPA), have issued a public notice to inform employers that the monthly salary cap for Tier 1 has been increased from GHS 35,000.00 to GHS 42,000.00, effective 1 January 2023.
The general mandatory monthly social security and occupational scheme contribution rates are as follows:
• For employers: 13% of the employee’s salary; and
• For employees: 5.5% of the employee’s salary.
The minimum insurable earning for 2023 has also been increased from GHS 365.33 to GHS 401.76, following the raise in the national daily minimum wage.
From 1 January 2023 the maximum and minimum contributions payable to SSNIT will be GHS 5,670.00 and GHS 54.24, respectively.
To view the public notice, follow the link.
Tax changes published in the Finance Law 2023
Business (professional) expenses allowance:
The 2023 Finance Law introduced a threshold of 78,000 dirhams for the allowance for professional expenses, which is within the 30% bracket (from 60,000 to 80,000 dirhams).
Previously, the deduction was 20%. Now it is as follows:
• 35% for gross annual income of up to 78,000 dirhams (6,500 dirhams/month)
• 25% for the others, with a ceiling raised from 30,000 to 35,000 dirhams (2,917 dirhams/month).
Below is an example of the tax rates, inclusive of the professional expenses.
Income tax rates:
Pension and life annuities
These incomes benefit from a flat-rate deduction, different from the one for professional expenses.
The allowance on income of less than 168,000 dirhams increases to 70%, while the allowance for the higher bracket remains at 40%.
Until now, this deduction was:
• 60% on the bracket of this income below 168,000 dirhams/year, after a first revaluation in 2019, where the allowance was 50%;
• 40% on the higher bracket.
To view the Finance Law 2023 (available in French only), follow the link.
Income Tax Amendment Act, 2022 published
Namibia published the Income Tax Amendment Act, 2022 (Act No. 13 of 2022) on 29 December 2022.
The most important measures applicable to employment include:
• An increase in the tax deduction for retirement fund and educational policy contributions by individuals from N$ 40,000 to N$ 150,000 from the year of assessment commencing on or after 1 March 2022;
• The removal of the condition that contributions paid under company-owned long-term insurance policies must be included in the taxable income of an employee or director before the company can claim a tax deduction;
• The addition of the provision that persons liable to furnish an income tax return may furnish the return in electronic form, as well as the provision that a notice of assessment following the examination of a return may be issued in writing or electronic form;
• The amendment of the rules relating to the allocation of tax payments, providing that where interest or penalties are payable in addition to the amount of tax due and the total amount due is not paid in full, the payment will be allocated:
• First, to the tax due;
• Second, to the interest due; and
• Third, to the penalty due.
To view the Income Tax Amendment Act, 2022, follow the link.
Tax changes enacted through the Income Tax (Amendment) Act, 2022
Tax changes announced in the 2023 budget speech were enacted through the Income Tax (Amendment) Act, 2022, published on 27 December 2022.
The exempt threshold for PAYE was increased from ZMK 4,500 per month to ZMK 4,800 per month.
In addition, the rate in the second band was reduced from 25% to 20%.
PAYE rates, effective 1 January 2023:
The tax credit for disabled individuals increased from ZMK 6,000 per annum to ZMK 7,200 per annum. Persons with a disability must be registered by the Zambia Agency for Persons with Disabilities.
To view the Income Tax (Amendment ) Act 2022, follow the link.
NAPSA contribution ceiling for 2023
The National Pension Scheme Authority (NAPSA) is mandated to review the contribution ceiling and pension payments annually and adjust them in line with the change in the national average earnings (NAE). This is in accordance with Section 35 of the National Pension Scheme Act No 40 of 1996.
The NAE are determined annually by the Zambia Statistics Agency.
The NAE figure for 2023 has increased from K 6,109 to K 6,710. Accordingly, the contribution ceiling has been revised to K 26,840 in 2023.
Effective 1 January 2023, the total maximum employee and employer monthly statutory contribution deductible is K 2,684.00, which is 10% of the contribution ceiling, constituting 5% employee share and 5% employer share.
The contribution rate remains unchanged at 10% of the employee’s monthly gross earnings subject to the statutory contribution ceiling above. Earnings, therefore, include basic salary, bonuses, commission, severance pay, overtime allowance, leave allowance, acting allowance, commuted leave days, etc.
NSSA POBS insurable earnings ceiling January – March 2023
The National Social Security Authority (NSSA) has published the new maximum amount for the Pension and Other Benefits Scheme (POBS) monthly contributions insurable earnings ceiling applicable to January, February and March 2023.
For October, November and December 2022, the insurable earnings ceiling was ZWL$ 451,499. For both employer and employee, the maximum deduction changed from ZWL$ 11,505.38 (4.5% x 255,675.00) to ZWL$ 20,317.46 (4.5% x 451,499.00).
For January, February and March 2023, the insurable earnings ceiling is ZWL$ 500,966.
For both employer and employee, the maximum deduction changed from ZWL$ 20,317.46 (4.5% x 451,499) to ZWL$ 22,543.47 (4.5% x 500,966).
To view the insurable earnings banner on the NSSA website, follow the link.
Contact our legislation team on email@example.com if you require any additional information.
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