Overview of VAT in Africa

To survive the current world recession, businesses have to manage their opportunities and risks carefully in order to remain competitive.

According to the ‘Africa Competitiveness Report 2009’, released by the World Economic Forum, the World Bank and the African Development Bank on 10 June 2009, African businesses can become far more competitive, but limited access to financial services, underdeveloped infrastructure, limited healthcare and educational services as well as poor institutional frameworks make African countries less competitive in the global marketplace.

Unfortunately, businesses do not have much control over government policies regarding these issues that affect their competitiveness and ability to survive the economic downturn.

However, one of the potential risks facing all businesses that can be managed is tax. Value added tax (VAT) has become the major consumption tax in Africa. The incorrect application of VAT can have severe and immediate cost implications for one or both parties involved in a transaction. Furthermore, harsh penalties are often levied by VAT authorities in the event of non-compliance.

In order to effectively manage VAT opportunities and risks when trading in Africa, a proper understanding of the VAT rules applying in Africa is essential. PricewaterhouseCoopers has an extensive Indirect Tax network in Africa, which can assist businesses in this regard.

To provide an overview of VAT in Africa to businesses engaged in trading, or intending to conduct business in Africa, this guide has been compiled by PwC Indirect Tax specialists in the following African countries: Botswana, Cameroon, Chad, Congo, Côte d’Ivoire, Equatorial Guinea, Gabon, Ghana, Kenya, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Senegal, South Africa, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe.

The guide outlines the VAT principles regarding VAT rates, registration with the relevant authorities, output tax, exemptions (where no VAT is charged and no input tax is allowed), zero-rating (where VAT is charged at 0% and input tax is allowed), input tax, imports and exports, VAT accounting and record keeping issues, as well as the basic principles relating to other indirect taxes. Specific advice on any VAT or other indirect tax-related issues can be obtained from our VAT specialists in the different countries, whose contact details are provided at the end of each country chapter.

The guide is based on the law in force as at 30 June 2009 and is an update of the two previous guides issued by PricewaterhouseCoopers relating to VAT in Africa, namely ‘VAT in Southern and Eastern Africa’ (October 2005) and ‘Overview of VAT in Africa’ (May 2007).

  • Botswana
  • Cameroon
  • Chad
  • Congo
  • Côte d’Ivoire
  • Equatorial Guinea
  • Gabon
  • Ghana
  • Kenya
  • Lesotho
  • Madagascar
  • Malawi

 

  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • Senegal
  • South Africa
  • Tanzania
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe