Kitty Miv, Editor
18 June, 2021
Although there have been many other issues bubbling away this week, including the ongoing international anti-avoidance discussions, the main ingredient in this week's column is budgets, of which there have been a bumper crop.
We'll start with Malawi, which doesn't often feature here, but, it appears, makes up for lost time when it does!
In its recently announced Budget, the Government of Malawi announced various changes to the value-added tax regime, including a considerable hike to the VAT registration threshold, from MWK10m to MWK25m (USD31,350). In addition, the authorities revealed that a new VAT exemption will be introduced for the aquaculture sector, and a VAT zero rate will be installed for domestically produced printed books and textbooks and for ethanol fuel.
Further, the Government stated its intention to introduce two new personal income tax rates: of 25 percent, on incomes of between MWK100,000 and MWK1m a month, and a new top rate of 40 percent, on income exceeding MWK6m a month.
Then, on June 10, Kenya unveiled its 2021-22 budget, which had a BEPS focus, and contained a number of changes to the country's international tax and value-added tax rules.
The Budget confirmed the introduction of new country-by-country (CbC) reporting requirements, based on the OECD BEPS Action Plan framework, for multinational groups. Reporting will be required for financial periods beginning from January 1, 2022, with a CbC report due within 12 months of the end of the relevant fiscal period.
The legislation also looks to amend the country's permanent establishment provisions, introduces new provisions to deny treaty benefits in inappropriate circumstances, and allows companies to carry forward their losses indefinitely.
There will be considerable changes also for digital marketplaces and their business users. Those selling goods via marketplaces or digital platforms to Kenyan consumers will be required to obtain a tax identification number, and VAT collection requirements will be significantly broadened to the digitally enabled sale of more goods and services.
The Budget also announced various VAT exemptions for medical goods, including for the treatment of patients with COVID-19.
Last but not least, Mauritius recently announced numerous tax relief measures for investors and for wealthy foreign individuals in its Budget.
For companies, the Budget includes a concessionary rate of corporate tax of three percent, rather than 15 percent, for companies engaged in the medical, biotechnology, and pharmaceutical sector. Further, they will be allowed a full tax credit for the cost of acquiring patents.
For individuals, the Budget announces a new "Premium Visa Scheme". The Government says the initiative is intended to encourage eligible foreigners to stay temporarily, for at least one year, in Mauritius, with the possibility of renewal, and will take effect retroactively, from November 1, 2020.
Until next week!
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