Posts

FEBRUARY 2020 – ZIMBABWE

PAYMENT OF TAX IN FOREIGN CURRENCY

It is important that employers note the following:

Zimbabwe Revenue Authority (ZIMRA) Public Notice

ZIMRA has issued a public notice regarding payment of tax in foreign currency.

Businesses trading in both RTGS$ and foreign currencies are required to pay taxes in foreign currency. Section 4A of the Finance Act (Chapter 23:04) and Section 38 of the Value Added Tax Act (Chapter 23:12) refers.

PAYE
Employers who are paying remuneration in foreign currency should remit the employee’s PAYE in foreign currency.

If part of the remuneration is paid partly in foreign currency and partly in RTGS$, employers must apportion the employee’s PAYE accordingly and remit both the foreign currency and RTGS$ to the commissioner on or before the due date.

To view the public notice, follow the link

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2020 C
RS Technologies (Pty)Ltd. All Rights Reserved.

JANUARY 2020 – MALAWI & ZIMBABWE

IMPORTANT TAX CHANGES

It is important that employers note the following:

MALAWI

Changes to PAYE Rates

A public notice was released by Malawi Revenue Authority with the new tax rates proposed in the 2019/2020 Budget Statement.

The Malawi government has increased the PAYE tax-free bracket to MK45,000 from MK35,000 per month.

Note: The effective date for the new tax tables is 22 November 2019, not the beginning of the tax year which is 1 July 2019.

It should also be noted that the minimum wage was increased from the current K962 per day (translating to K25,012 per month) to K1,346.15 per day which translates to K35,000 per month.

ZIMBABWE

Changes to the PAYE Rates

With effect from 1 January 2020 the tax free threshold increased to $24000 per annum for remuneration earned in ZWL and to USD$840 for remuneration earned in foreign currency.

Annual Tax Tables from 1 January 2020 to 31 December 2020 – Zimbabwe Dollars (ZWL)

The tax-free bonus increased from $1,000 to $5,000 with effect from 1 November 2019

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2019 C
RS Technologies (Pty)Ltd. All Rights Reserved.

SEPTEMBER 2019 – ZIMBABWE
CURRENCY REFORMS AND TAX CHANGES

It is important that employers note the following: 

Changes to tax rates due to currency reforms

Currency reforms

Statutory Instrument (SI) 142 of 2019, published as part of the Reserve Bank of Zimbabwe (Legal Tender) Regulations 2019, declares that the Zimbabwean dollar will be the sole currency for legal tender purposes, effective 24 June 2019.

The RTGS (Real Time Gross Settlement) dollar was introduced in February as a first step towards a new currency by year’s end. RTGS dollar means any funds held as bank deposits under the RTGS system established in terms of the National Payment Systems Act. Bond notes and RTGS dollars are at par with the Zimbabwe dollar (ZW$).

Other currencies, specifically US dollars, British pounds, South African rand and Botswana pula, are no longer legal tender. Even though SI 142 is valid, it does not expressly state that foreign currencies cannot be used in transactions or to price goods.

Tax changes

As a result of the currency adjustments, the Minister of Finance and Economic Development, Hon Prof Mthuli Ncube, announced in the 2019 mid-year budget review and supplementary budget, delivered in August 2019, a review of the tax-free threshold from the current ZW$350 to ZW$700 and widening of the tax bands to a maximum of ZW$30 000, above which income is taxed at the marginal tax rate of 40%, including separate US$ and ZW$ tax tables. This took effect on 1 August 2019.

Employees who earn in foreign currency will, however, continue to settle their tax liability in foreign currency. Every enactment in US$ is to be construed to be ZW$ at a rate of 1:1.

A new Final Deduction System (FDS) year of assessment came into effect on 1 August 2019 and ends on 31 December 2019. Taxpayers will be required to submit two annual income tax returns (ITF16s) for 2019.

Annual Tax Rates before and after 1 August 2019:

 

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2019 C
RS Technologies (Pty)Ltd. All Rights Reserved.

Zimbabwe 2019 Budget Highlights

Highlights of the 2019 budget speech delivered by Finance Minister Mthuli Ncube:

  • Budget deficit of $1,5 billion or 5% of GDP
  • Growth in 2019 at about 3,1%
  • Total revenues for 2019 projected at $6,6 billion
  • Total expenditures for 2019 projected at $8,16 billion
  • Inflationary pressure to stabilise in 2019
  • Increase excise duty on cigarettes from US$20 to US$25 per 1000 sticks
  • Introduce customs duty on motor vehicles and other selected goods in foreign currency
  • Companies that collect VAT or any other taxes in United States dollars or any other currency to remit VAT using the same mode of payment
  • Increase Excise Duty by 7 cents per litre on diesel & paraffin and 6.5 cents on petrol to reduce the arbitrage opportunities.

Tax Relief Measures:

  • Review the tax-free threshold from US$300 to US$350 and further widen the tax bands from US$351 to US$20,000, above which income is taxed at the highest marginal tax rate of 45%
  • Provide for further exemptions from the 2% Intermediated Money Transfer Tax
  • Suspend customs duty and also exempt from VAT, sanitary ware products for a period of 12 months
  • Suspension of customs duty on selected goods used by the physically challenged persons
  • Redirect 5% of Third Party Insurance Cover to an Accident Compensation Fund

Government Ministries and Departments to remit all revenue collected into the Consolidated Revenue Fund

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2019 CRS Technologies (Pty)Ltd. All Rights Reserved.

GHANA 2018 TAX CHANGES

The Income Tax proposals presented by the Minister of Finance in the 2017/2018 Budget Statement of Ghana, has been assented by the President.

The Income Tax (Amendment) (No. 2) Act, 2017 pegs the tax-free income of a resident individual at the new national minimum wage of GHc9.68 per day which came into effect 1 January 2018.

Annual Personal Income Tax Brackets:

MOZAMBIQUE NEW SOCIAL SECURITY REGULATIONS

The new Regulation on Compulsory Social Security, Decree No. 51/2017, of 09 October has recently been published and enters into force 30 days after publication, which is 8 January 2018.

Highlights of the new regulation:

  • Employers registered with the INSS has an obligation to notify the INSS about changes in taxpayer / beneficiary data.
  • Foreign nationals working in Mozambique must provide documentary evidence that they are enrolled in a social security system in another country in order to avoid being obliged to contribute to Mozambique’s National Social Security Institute (INSS).
  • Monthly payments of contributions to the INSS can be made from the 20th of the respective month up to the 10th of the following month.
  • Interest arising from late payment of contributions increases from 1% to 2% for each month of delay.
  • An individual is entitled to the full old age pension benefits when they have completed 420 months of contributions, irrespective of their age. The previous legislation required 300 months.
  • An individual is entitled to partial old age pension benefits when they reach the retirement age of 55 for women and 60 for men and have contributed for at least 240 months. Previous legislation required 120 months.
  • The base for the calculation of the social security contributions include, but is not limited to, base salary, income replacement compensation, seniority and management bonuses, other bonuses, productivity and attendance rewards paid on a regular basis, overtime remuneration, subsidies, commissions and other benefits of similar nature paid on a regular basis.

NIGERIA 2018 BUDGET SPEECH HIGHLIGHTS

  • Nigeria has moved up 24 places from 169 to 145 on the 2018 World Bank’s ease of doing business ranking.
  • The 2018 budget deficit of about NGN2.005 trillion will be financed mainly through new borrowing of NGN1.699 trillion while the balance of NGN 306 billion is expected to come from the privatisation of non-oil assets.
  • Real GDP growth rate for the 2nd quarter of 2017 was 0.55%. The IMF projects a global growth of 3.7% for 2018.
  • There are no specific proposals to change, repeal or impose new taxes in 2018.

TUNISIA 2018 BUDGET PROPOSALS

The Tunisian Parliament has approved the budget for the 2018 fiscal year in December 2017.

It forecasts the budget deficit to fall to 4.9% of gross domestic product in 2018, from about 6% expected in 2017. Tunisia aims to raise GDP growth to about 3% from 2.3% in 2017.

The parliament approved a rise of 1 percentage point in VAT and imposed a new 1% social security tax on employees and companies.

Note: This contribution will be used to finance the social security funds.

The draft Finance Law 2018 was published by the Ministry of Finance and has been validated by a restricted ministerial council. The Finance Law provides for the revision of the Schedule of Income Tax for Individuals (IRPP) by a 100 basis point increase in the tax rate on each income bracket.

The new tax scale for 2018 is included in the draft budget law and will come into effect from 1 January 2018 upon approval and publishing of such approval.

ZIMBABWE 2018 BUDGET HIGHLIGHTS

Zimbabwe’s Minister of Finance & Economic Development, Hon. P. A. Chinamasa (M.P.), presented his 2018 budget statement to the Parliament on 7 December 2017.

The key proposals contained in the draft Finance Bill and highlights of the budget are as follows:

  • The Budget deficit for 2018, given total revenues available for Appropriation by Parliament of US$5.071 billion, and total expenditure and net lending of US$5.743 billion, translate to a fiscal deficit of US$672 million, representing 3.5% of GDP.
  • The 2018 Budget also contains administrative measures to improve administration of tax exemption for development partners funded projects.
  • A second tax amnesty has been proposed, expiring on 30 June 2018.
  • Several sections in the Income Tax Act which previously resulted in penalties and interest, are proposed to be repealed.
  • No income tax changes were proposed.

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

ZIMBABWE 2017 BUDGET SPEECH

Zimbabwe’s Minister of Finance, the honourable Patrick Chinamasa, presented the 2017 National Budget in December 2016.

Highlights of the budget speech summarized:

  • GDP growth is projected at 1.7%, from 0.6% estimated in 2016.
  • Budget deficit is projected at 2.7% of GDP in 2017.

Proposed changes:

  • Introduction of tax incentives for companies operating in Special Economic Zones.
  • Exemption of 15% withholding non-resident tax on fees, in respect of fees already subjected to 20% withholding taxes as non-executive director’s fees.

The following remains the same:

  • The tax-free band remains at US$3 600 per annum or US$300 per month.
  • The upper-income tax bands remain at US$240 000 per annum or US$20 000 per month.
  • The maximum tax-free bonus remains at US$1 000.
  • The tax-free exchange in respect of a severance package will be the higher of US$10 000 or 1/3 of the severance package, up to a maximum of 1/3 of an amount of US$60 000.
  • Pension income paid from a Pension Fund or Consolidated Revenue Fund to elderly taxpayers who are 55 years old or more, is exempt from tax.
  • Fringe Benefits are taxed in the hands of the employee based on the cost to the employer.

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2017 CRS Technologies (Pty)Ltd. All Rights Reserved.

Inspired, engaged and rewarded employees
CONTACT INFORMATION
Tel: +27 11 2594700
Email: info@crs.co.za

Centric House, Mellis Court, Mellis Road
Rivonia 2191