Why is tax one of the biggest business risks in Africa, that interlinks with corruption?
Corrupt officials and governments use the desperately needed tax funds for social uplifting and development in a corrupt manner. This places more pressure on the fiscus to collect more taxes. MNEs then start facing ambitious, but often wrong tax assessments to fill the demand for more taxes. This places strain on foreign offshore MNEs to reconsider their investments into Africa, because their returns are eaten up by wrongful tax charges, particularly in:
- the wrong application of transfer pricing principles;
- ignoring tax treaty provisions when imposing withholding tax charges;
- subjecting foreign expertise into Africa to VAT charges, which are counter-productive and discriminatory;
- failing to adhere to the principles of free trade imposed by the World Trade Organization – GATT & GATS, when imposing WHT and VAT, and not just customs and excise taxes.
For more information, visit the sponsor desk of TRM Daniel Erasmus Tax Court Practitioners at the conference in Cape Town, 21/22 May at the Radisson Blu Hotel.
Prof. Dr. Daniel N. Erasmus will be in attendance and ready to answer any questions and concerns you may have. He has lectured and advised many postgraduate students (in advisory positions and business) and MNEs in Africa on these issues.
Tel: +27 83 458 8422