Covid 19 – Central Africa implements exceptional tax and social measures

Covid 19 – Central Africa implements exceptional tax and social measures

In order to take into account the impact of the coronavirus epidemic on economic activity, the tax administrations in Central Africa have put in place exceptional measures to support the economy strongly impacted, in particular by the total or partial lockdown, imposed to contain covid-19. These measures range from deferral of tax and social contribution payment, to tax-customs exemptions related to imports of various materials and products to deal with the pandemic, the unlimited deductibility of donations made in the framework of government aid to struggle it, passing by new regulations of the activities in order to increase the revenues of the State.

These measures took the form of bulletin, decree, etc., and then resulted in the revision of the budget for the financial year 2020, by the amended finance laws that will be made public in the coming days.
Below are the main measures taken for each country.

Cameroon
Through the Special Statement of the Prime Minister, Head of Government of April 30, 2020, followed by Circular No. 20/169/CF/MINFI/DGI/DLRI/L of May 13, 2020, Clarifying the Application of Tax Measures to Respond to Covid-19, and Ordinance No 2020/08 of 03 June 2020 amending and supplementing certain provisions of Law No 2019/023 of 24 December 2019 on the Finance Law of the Republic of Cameroon for the financial year 2020, the Government has taken customs-tax related measures with restrictions, and specificities, whose there are the main ones:

  • Suspension for the 2nd quarter 2020 of general accounting audits, except in case of suspicious tax behavior;
  • Suspension for a period of three months, namely April, May and June, of on-site inspections by the National Social Insurance Fund (NSIF);
  • Cancellation of penalties for late payment of social contributions due to the NSIF, on justified request;
  • Extension of the deadline for filing yearly tax return(DSF) without penalties in case of payment of the corresponding balance;
  • Suspension of the application of tax recovery measures for companies directly affected by the crisis;
  • Support to the treasury of companies through the special allocation of FCFA 25 Billion, for the clearance of stocks of value added tax credits pending reimbursement.
  • Postponement to September 30, 2020 of the deadline for payment of the real-estate tax for fiscal year 2020.
  • Full deductibility for corporate tax determination of corporate handouts donations and liberalities for the fight against COVID-19.
  • Exemption of resort tax for the rest of the year 2020.
  • Exemption of the Tax on Discharge and the Parking Tax for Taxis and Motorcycle Taxis and the Axle Tax for the Second Quarter 2020.
  • Exemption for the 2nd quarter of the discharge tax and the communal taxes for the benefit of the resellers
  • Exemption from value added tax (VAT) of equipment purchases, materials and products for the fight against coronavirus according to a predetermined list
  • Temporary suspension for a period of 3 months of the payment of parking and demurrage costs in the ports of Douala and Kribi for the products of primary need;
  • Full exoneration of Customs Duties and Taxes on the Importation of Products and Materials for the Prevention and fight against Covid-19
    Suspension of interest on late payment of customs duties and charges

Gabon

In the framework of the fight against the coronavirus, the Prime Minister, Head of Government, has declined on Thursday, April 10, 2020 in Libreville, the applicable modalities of the various health, economic and social measures related to the coronavirus in Gabon. On the other hand, it was adopted during the Ministerial Council chaired by the Head of State on June 12, 2020, a draft amending finance law for the financial year 2020, to give Gabon the means to overcome the effects related to the crisis of Covid-19 and prepare the recovery of the economy. There is no doubt that other tax measures will be taken.

Key taxes measures already in place include:

  • Reduction of patent and synthetic tax (ISL);
  • Remittance of taxes to citizen companies (IS and IRPP) that will preserve employment, will show solidarity and exemplary in the current crisis situation;
  • Tax rebate of all bonuses granted to employees who will work during the period of lockdown;
  • Deferral to July 31, 2020 of the filing of tax returns scheduled for April 30, 2020, including DSF, DAS, and Transfer Pricing Reporting. ;
  • Deferral, and split payment of the corporate tax balance, in three equal monthly instalments on April 30, 2020, May 31, 2020 and June 30, 2020.

Congo
Through bulletin N° 0247/MFB-CAB signed on April 15, 2020, the Ministry of Finance and Budget has taken Business Coaching Measures to fight against the economic effects of COVID-19 in order to maintain the dynamics of the value chain, to preserve the jobs, whose the most important are restore to you:

  • Facilitation and acceleration of procedures for the clearance of goods, in particular pharmaceuticals, medical equipment and essential foodstuffs and hygiene products.
  • Non-application of inspection fees, in accordance with the Finance Act 2020.
  • Suspension of ex-post customs controls for a period of 3 months, from March, with the possibility of extension after assessment of the health emergency situation.
  • Suspension, for 3 months from April 2020, of all controls or audits initiated in companies by public administrations (IGF, IGE, etc.) as well as those initiated by bodies under local authorities. Controls related to the fight against cost of living and security are not concerned.
  • Suspension of ongoing tax Audit
  • Extension of the reporting period for financial statements of companies
  • Extension of the reporting and payment deadlines for taxes due on a monthly basis
  • No-application of penalties, fines and late interest over the two-month renewable period, if necessary.
  • Deferral until June 30, 2020, for the payment of the Single Tax on Salaries (TUS) of 7.5%, starting in April, to reduce the expenses of companies to allow them to maintain their workforce during the crisis period. This measure can be renewed if needed.
  • Deferral of the payment of the following local taxes by two months renewable if required, starting in April 2020 and on a case-by-case basis, depending on the business type:
    – occupancy tax on premises for professional use,
    – land contributions from built and undeveloped properties,
    – tax on shows, games and entertainment.

Other customs and tax measures have been introduced in the 2020 amending Finance Act including:

  • The Corporate Income Tax (CIT) rate reduction for fiscal year 2020, from 30% to 28%.
  • The reduction of the flat-rate global tax rate from 7% to 5% of annual turnover excluding taxes for operators selling products at free margins and from 10% to 8% of the annual margin excluding taxes for operators selling products at prices regulated and margin-controlled.
  • Tax rebate at 100% for donations to the State under the COVID-19 Solidarity Fund set up by the State to fight against COVID-19

Chad
Through the circular Nº 004/PR/MFB/2020 The Ministry of Finance and Budget announced measures to implement social and economic measures related to the fight against Coronavirus. The requirements of this circular, as well as other measures, may be proposed for adoption under the amending finance law in preparation.

The most important tax and customs measures, with some restrictions on their content, include:

  • 50% reduction in patent and IGL contribution
  • Suspension of spot checks and general accounting audits
  • Examination of requests of companies particularly affected by the social measures taken
  • Facilities in terms of exemption of products (food and medical) and medical devices
  • Exoneration of Duties and Taxes on Medical Products and Devices that are actually part of the Response to Covid-19

Specific measures are to be taken by municipalities and services decentralized from taxes, in particular the reduction of 50% of place duties and other related taxes for the benefit of the owners of shops and stalls operating in the markets and neighborhoods of the City of N’Djamena for six (6) months from 15 April 2020 and free of charge for the management of drinking water supplies

Central African Republic.
The Minister of Finance and Budget and his close collaborators have worked out on this Friday, May 15, 2020 on the draft finance amending law 2020.
The main focus of this draft amending finance law is the handling in the finance initial law, the new deal introduced by the Covid-19 pandemic.
This preliminary draft finance amending law 2020 follows new directions and new measures stemming from the situation of coronavirus health crisis. It will soon be discussed and approved by the government in council of ministers, then transferred to the National Assembly for review and adoption.
An update will be made as soon as the bill is passed.

Equatorial Guinea
The Ministry of Mines and Hydrocarbons (MMH) of the Republic of Equatorial Guinea announced the adoption of the new Oil Operations Regulation, through Regulation No. 2/2020 of 15 June 2020.
The new regulation is considered a pillar of Equatorial Guinea’s post-COVID recovery strategy and clarifies several aspects of oil operations in the country.
The new regulation modernizes the existing regulatory framework in Equatorial Guinea and aims to maintain the country’s attractiveness for foreign investors.
According to Minister of Mines and Hydrocarbons “to maintain our position, we must be prepared, with up-to-date rules and policies, to meet the major challenge that the recovery in commodity prices will pose to the sector, the Recovering Commodity Prices, Creating Jobs and Delivering Projects After Covid-19”

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