8 Strange Or Over-The-Top African Taxes And Tax Exemptions

8 Strange Or Over-The-Top African Taxes And Tax Exemptions

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Many African countries have made noticeable progress collecting taxes. The average tax ratio — proportion of taxes collected in relation to gross domestic product — has risen steadily on the continent since the 1990s. African governments have been getting increasingly creative about how they collect tax revenue. They’re also creative about giving tax exemptions to stimulate the economy.

Check out 8 strange or over-the-top African taxes and tax exemptions.

Source: Africaneconomicoutlook.org


Turkish baths, Morocco

Turkish baths, which involve steaming or soaking for long periods in a tub or steam room — either alone or solo — have long been a tradition in Morocco. Turkish baths are exempt from value-added tax, or VAT. VAT differs from sales tax in that taxes are applied to the difference between the seller-purchased price and the resale price. However, if the bather in Turkish baths chooses to buy soap from the establishment, that will be taxed at 7 percent, according to Management-issues.com.


Unprocessed green tea in Kenya

In Kenya, unprocessed green tea is exempt from a value-added tax. When a tea is processed, it undergoes an oxidation period by which it becomes much darker. But it is perfectly healthy to drink unprocessed green tea, and if you choose to do so, you could see a discount, says Ey.com.


Imported sea shells tax in South Africa

In South Africa, sea shells are considered a valued commodity. You need a license to have a certain amount of sea shells in your possession, according to Sars.gov.za. You’ll also pay hefty taxes if you import them. Importing sea shells to South Africa will cost you a 20 percent Most Favored Nation fee, along with a 14 percent sale tax, according to Dutycalculator.com.

Pierre Nkurunziza, president of Burundi, cctv-africa.com
Pierre Nkurunziza, President of Burundi,

Double taxation in Burundi

Double taxation occurs when an income earned in one territory that is paid to somebody in another territory is taxed twice, in both territories. Several African countries have non-double taxation treaties with other nations, which offer a huge relief to the taxpayer. Burundi, however, has no such treaty with other countries, says NewVision.co.ug.


Double VAT in Nigeria

Nigeria said in 2015 it would double its value-added tax to 10 percent to help boost the economy. The country is the largest crude oil producer in Africa and counts on oil to bring in 70 percent of government revenue and over 90 percent of foreign exchange. Since the value of the product has dropped so dramatically, part of the country’s plan to keep the economy afloat is to increase VAT on most other items, Bloomberg.com reported.

Ancient Egyptian Pyramids 2

General income tax in Egypt

If you think taxes are high where you live, you might feel relieved after looking into Egyptian tax laws. Some professionals can be taxed up to 65 percent in general income taxes in addition to their individual taxes. Tax evasion is a major issue in the country, especially among high earners. There are two types of taxes — one levied on individual sources of income and another general income tax on total income, according to JustLanded.com.

Algeria Football Fans
Algeria Football Fans – RT.com

Job creation tax exemption in Algeria

Algeria recently created tax incentives to attract foreign investors. One incentive provides temporary exemption from corporate tax for foreign investors who create 100 jobs or more in the country via their business activities. Foreign investors who invest in certain strategic sectors such as advanced technologies, the food industry, mechanics, and the automotive are also exempt from corporate tax, says Taxsummaries.pwc.com.


Sugar tax in South Africa

Analysts believe that if South Africans continue to consume sugar at the current rate, 9 million will be obese by 2017. The government’s reaction to this forecast is to raise the tax on sugar-sweetened beverages. Sugary drinks will see a tax spike of 20 percent in South Africa, and this is just one step the government is taking to reduce the nation’s obesity rate, says Businesstech.co.za.