Africa Tax: Dwindling revenues means increased diligence from authorities

A shrinking revenue base is top of mind for tax authorities in Africa as much as it is for their counterparts the world over. The upshot for businesses is that they can expect a more rigorous pursuit of tax revenues from governments, substantiating the need for sound advice and assurance for full compliance with relevant legislation in every territory in which they operate.

We have these conferences to better serve clients by connecting them with our teams across Africa; since taxation is a dynamic activity, it is necessary for companies to keep abreast of developments and trends to remain within the gambit of the law while minimising tax exposure,

In situations of economic down turn, a modern tax payer is faced with a dynamic market with many competitors, regulators, tax authorities and investors scrutinising transactions with unprecedented intensity. He or she requires ideas to be able to counter business risks including tax risks. The Africa Tax conference will explore some of the tax planning ideas that will help the tax payer be able to deal with the ever increasing tentacles of the revenue authorities.

Transfer pricing has been identified as one of the most important tax issues globally.

In the recent past revenue authorities have been requesting companies to prepare Transfer Pricing polices and related documentation. The target group cuts across all sectors. Multinational companies are therefore advised to ensure that they develop and implement a transfer pricing policy in line with the applicable tax legislation, says Gachahi.

Among the challenges presented by taxation is the interpretation of the laws which pertain to any one jurisdiction. An emerging trend is that international standards and precedents are drawn upon by authorities, providing a best practice yardstick against which to gauge their tax legislation and collection policies.

Many countries have not entered into double taxation treaties which would help in reducing the tax effects of transactions, observes Gitahi. The conference will help in sensitizing states to lobby with their revenue authorities and come up with double tax treaties to mitigate the effects of double taxation.