Tax Problems Deter Investors Away From Africa

October 2, 2013 Taxation In Africa

 South Africa tax filingJOHANNESBURG – Despite growing improvements in the tax administration of African nations, investors are still hesitant to do business in the region due to uncertainty around tax regulations and legislation.

On October 1st PriceWaterhouseCoopers released a new report on taxation in Africa, containing the results of a survey on the tax issues faced by international businesses operating in Africa, showing that taxes are still a major hurdle for any multinational company or international investor while establishing and operating a business a region.

Tax was shown to be the second most significant difficulty faced by companies working in Africa, particularly in regards to uncertainty around the tax regulation and administration for the business.

It was noted that the number of tax audits being conducted in Africa is also increasing significantly, with the rise being attributed to attempts by tax authorities to use audits as a means “…to meet certain revenue deadlines and targets.”

The report also highlighted a lack of professional tax advisers and consultants who can provide first-hand knowledge and experience when working with tax authorities in African countries.

However, on a positive side, the report showed that the tax authorities in African nations are rapidly “…gaining more knowledge and sophistication”, especially in regards to international information sharing, and implementing modern taxation practice and investigations, particularly in the enforcement of modern transfer pricing structures.

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