More on Tax

by Developed Africa 29. April 2014 09:00

Following yesterday's blog about taxing foreign investors, today we look at the impact of taxes in general.

A major problem companies come across when doing business in Africa are the high withholding taxes that are charged in some countries. 

withholding taxes differ from country to country, and the rates fluctuate from 5% to 30%"

Governments institute such high withholding taxes in order to protect their tax bases from "BEPS", the term given to Base erosion and Profit shifting, tax evasion essentially. But in having extremely high withholding tax rates, some countries have seen companies entering into complex arrangements which allow them to get around these high rates.

This is an ongoing debate across many countries, as to whether governments better protect themselves by taxing high, or if they actually cause harm to their economies by putting off investors and businesses. 

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