OVERZEALOUS AUTHORITIES
DIANNA GAMES: Multinational tax in Africa: path to prosperity or ruin?
Tanzanian President John Magufuli’s tax overhaul may endanger investment, writes Dianna Games
The growing tax and compliance burden in Africa — the result of a new push for growth and a desperation to fill dwindling coffers — may come at the cost of long-term growth if not handled carefully. Last week, Reuters reported that a tough new tax regime put in place by Tanzania’s President John Magufuli had led a number of large investors to reconsider their investments in that country. Some, the report said, were looking at scaling back their operations or expansion plans, with at least one considering disinvestment. The changes, which form part of Magufuli’s plans to overhaul the economy, include tax hikes on mobile money transfers, banking, tourism services and cargo transit services. The president aims to double the country’s tax revenues this year from the $4.5bn raised in the 2014-15 financial year. The new taxes are not always aligned to incomes. One company said its tax bill was now larger than its combined sales for the past five years, raising questions about sustainabili...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.