5 African countries with lowest tax rates

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5 African countries with lowest tax rates
5 African countries with lowest tax rates

5 African countries with lowest tax rates

Tax rate refers to the percentage at which an individual or business is taxed. The tax rate can be presented in several ways such as statutory, average, marginal, and effective.
Effective tax rate refers to the total tax rate a company pays on its earned income.

The statutory tax rate refers to the rate established by law on taxable income that falls within a given tax bracket.

Marginal tax rate refers to an amount of additional tax paid for every additional money earned as income.

HOW TO DETERMINE THE TAX RATE

The tax rate is determined by dividing the income tax expense by the income earned.
ORGANISATION FOR CO-OPERCO-OPERATION AND ECONOMIC DEVELOPMENT (OECD). An OECD report from the years 1990 to 2018 has revealed the tax revenue statistics in Africa, the report breaks down current tax structures in the region and how they have evolved over time.

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The average African tax-to-GDP ratio between 2010 and 2018 increased by 1.4 percentage points, from 15.1 percent to 16.5 percent, this was due to revenue increases from value-added taxes (VAT, 1 percentage point) and individual income taxes (0.7 percentage points), while corporate income taxes decreased (by 0.5 percentage points). The average ratio has tabled at 16.4/16.5 percent since 2014, as increases in some countries offset decreases in others.

The greatest source of tax revenue for African countries was taxed on goods and services and it was 51.9 percent.

AFRICAN COUNTRIES WITH LOW TAX RATE

1 . Firstly, SUDAN

The Personal Income Tax Rate in Sudan has been the same at 15 percent in 2020 from 15 percent in 2019. This is a tax collected from individuals and is imposed on different sources of income like labor, pensions, interest, and dividends.

2 . Secondly, SIERRA LEONE

The Personal Income Tax in Sierra Leone stands at 15%. In January 2022, the president reduced the income tax for minerals and Petroleum from 30% to 25%.

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3 . Thirdly, Seychelles

This country is a great destination for foreign investors and corporations when it comes to taxation.  Seychelles is a tax-free entity for offshore companies and it is well guaranteed by legislation. The income tax rate has been 15% since 2019 and 15% on goods not consumed in Seychelles.

4 . Also, MAURITIUS

The standard tax rate in MAURITIUS is 15% but is reduced to 10% for individuals who do not earn up to MUR 650,000 in a year. The country does not tax capital gains made by individuals.

5 . Finally, NIGERIA

The Personal Income Tax Rate in Nigeria stands at 24%

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