May 2022 / Focus Africa

May 30 2022

Africa in Review by the Numbers (May 2022)

$100 million Risk-sharing facility signed by British International Investment to provide systemic liquidity and help Citi, a global leader in trade and supply chain finance solutions. This facility will help grow its supply chain finance product across Africa. (CEO Business Africa)   1 billion Rides recorded by Uber across all its markets in Africa. This milestone comes nearly a decade since the mobility tech company launched in South Africa before expanding into other African countries, creating over 6 million economic opportunities. (Techcrunch)   46 MW  Biomass power plant under construction in Côte d'Ivoire, making it the largest such facility fuelled by agricultural waste in West Africa. Built at an estimated cost of $276 million, the plant will be transferred to the state of Côte d'Ivoire after the conclusion of the 25-year concession tenure. (NS Energy)   $60 billion Estimated financing sub-Saharan needs to access reliable electricity and clean cooking facilities between now and 2030. According to the Minister of State for Petroleum Resources in Nigeria, an annual investment of $35 billion could bring electricity access to 759 million Africans who currently lack it. (This Day)   20 million Farmers set to benefit from AfDB’s $1.5 billion emergency food facility to help African countries avert a looming food crisis caused by Russia’s war in Ukraine and persisting impacts of the Covid-19 pandemic. (Reuters)   60.7% Percentage by which Shelter Afrique's debut bond in Nigeria was oversubscribed, demonstrating investor confidence in the local housing market. The pan-African housing finance and development institution will use the bond proceeds to fund mass-housing developments and to provide lines of credit. (Africa Global Funds)   $2 billion Funding launched by African Finance Corporation to to support bank-driven economic recovery and resilience in Africa. This facility, dubbed African Economic Resilience, will be disbursed via loans from AFC to select commercial banks, regional development banks and central banks in various African countries. (African Business)   24% Nigeria's share of oil and gas projects starting in Africa between now and 2026, with 109 of the continent's 400 oil and gas projects expected to be launched in the West African country. Of these, the largest proportion will be in the downstream refining segment, which should see 38 projects come on-line. (Energy Day Nigeria)   92.4 million litres Milk produced by Zimbabwe’s leading dairy processor, Dairibord Holdings, resulting in 55% growth compared to the previous year. This jump in production was largely driven by significant growth in the beverages segment, with production volumes up by 84%, while foods jumped by 34%. (Food Business Africa)   $20 million Fund closed by Cape Town-headquartered venture capital firm Havaic to boost early-stage tech investments in Africa. Launched in partnership with Universum Wealth, the fund will invest in impactful tech companies in South, East and West Africa. (Disrupt Africa)   538% Growth recorded by Cadbury Nigeria Plc for the first quarter of 2022. The pre-tax profit growth follows a 52% fall in profits in 2021, as rising costs outstripped revenue growth over the year. The company attributed the growth to its repositioning strategy within a challenging environment. (Food Business Africa)   400 MW Geothermal power to be added to Kenya’s national grid in the next five years under a project by KenGen to rehabilitate some of its geothermal power plants and upgrade others as it continues with exploration around Olkaria and Eburru. (The Standard)   $25 billion Funding target by AfDB for climate resilience projects across Africa by 2025, doubling the bank's commitment over the last five years to helping countries mitigate and adapt to the effects of climate change. (The East African)   260,000 People living with hearing impairment set to benefit from the first sign language app launched in Kenya. The app aims to close the communication gap and simplify communication with people in health, education, judicial system, and finance. (Allure)   130% Estimated increase in share earnings projected for South Africa’s leading integrated poultry producer, Astral Foods Limited. The improved earnings were achieved through rising poultry sales volumes resulting from significant capital investments to enhance Astral’s poultry production and processing capacity. (Food Business Africa)   Review by Kili Partners . Powered by Asoko Insight
May 16 2022

Kenyan Government Proposes Increase of Digital Service Tax from 1.5% to 3%

The government seeks to increase digital service tax from 1.5% to 3% of the gross transaction value. The proposal is one of several amendments contained in Finance Bill 2022, intended to enhance revenue collection.

The Bill further proposes to amend the VAT Act, to clarify that the requirement for mainstream VAT registration does not apply to persons supplying imported digital services over the internet or through a digital marketplace. The Value Added Tax (Digital Marketplace Supply) Regulations of 2020 provide for these persons to register through a simplified VAT registration framework. They may also appoint a tax representative if they elect not to register. Unlike the mainstream VAT registration, that requires an annual turnover threshold of KES 5,000,000, the Regulations do not provide for a registration threshold.

The Bill has been submitted to the Parliament's Departmental Committee on Finance and National Planning for review. If accepted, the proposed amendments will take effect from 01 July 2022.

May 18 2022

South Africa Updates Comprehensive Guide to Dividends Tax

The South African Revenue Service (SARS) has published a comprehensive guide to dividends tax, Issue 5. The purpose of this guide is to assist taxpayers in gaining a more in-depth understanding of dividends tax. The foundation for this guide can be found in the various explanatory memoranda which supported the dividends tax legislation, but the explanations contained in these explanatory memoranda have been expanded with additional explanations and examples.

The guide deals, amongst others, with the following:

  • introduction to dividends tax;
  • the definitions of a company, contributed tax capital, dividend, dividend cycle, equity share, foreign dividend, listed company, listed share, share, beneficial owner, return of capital and regulated intermediary;
  • levy of dividends tax, liability for dividends tax, deeming provisions and special rules applying to specified companies;
  • exemption from dividends tax and relief from double taxation;
  • withholding of dividends tax;
  • secondary tax on companies credit;
  • payment and recovery of dividends tax assessments, non-compliance, electronic communication and record-keeping;
  • refund of dividends tax;
  • rebate against normal tax or dividends tax in respect of foreign taxes on dividends; and
  • company reorganisation rules – contributed tax contribution and dividends tax.

The information in this guide is based on the income tax and tax administration legislation (as amended) at the time of publication of this guide and includes the Rates and Monetary Amounts and Amendment of Revenue Laws Act 19 of 2021, the Taxation Laws Amendment Act 20 of 2021 and the Tax Administration Laws Amendment Act 21 of 2021. These Acts were all promulgated on 19 January 2022.