The fiscal year of several African countries is from January to December. Consequently, a raft of legislation is promulgated at the end of each calendar year which becomes effective on 1 January of the following year, and which affects the tax deducted from employees and/or changes the cost of employment for employers.
Below we have highlighted changes, effective 1 January 2024 in the following countries:
On 11 October 2023, The Council of Ministers, under the chairmanship of the President of the Republic adopted seven decrees which would in effect accelerate the process of implementing universal health insurance. The universal health coverage aims to achieve equal access to essential or primary health care for all. The Government aims to complete the rollout of the universal health system by 2025.
The proposals that will impact the Client’s payroll include the following:
The deduction towards Universal Health Insurance will add a burden to the employee and it will also be an additional cost to the employer.
The General State Budget (OGE) for 2024 was approved by the National Assembly on 13 December 2023 and enacted on 26 December 2023. The amendments to the 2024 Economic Year (OGE-2024) appear in Law No. 15/23, of 29 December 2023 (OGE-2024 Law), and in all its annexes. The Law, and concomitantly the changes to payroll, are effective from 1 January 2024.
Article 20 amends the Employment Income Tax Code (Imposto sobre os Rendimentos do Trabalho) and will affect employee’s taxes as follows:
The changes to the tax table will provide some relief to employees at all levels of income.
However, cognizance should be taken of the fact that Angola has experienced high inflation over the second half of 2023 (refer to the graph below) which will have eroded employees purchasing power. Any reduction in taxes paid in 2024 will therefore be a welcome relief.
The Presidency of the Republic published ‘Ordonnance No 2023-179 du 13 September 2023″ which will take effect on 1 January 2024. The consequence of the Ordinance is a comprehensive reform of the calculation of personal taxes relating to salary, wages, pensions, and life annuities. The reform is the result of suggestions by the IMF which stated that the previous “… personal income tax regime is complex and regressive”.
Previously, ITS comprised of three different taxes which were payable by the employee, namely:
The ITS reform consists of the following:
In general, most employees will experience a small increase in net take-home pay. Some employees will experience slightly higher taxes and concomitantly, lower take-home pay. This will depend on the number of dependents which is applied to the above Tax Rebate for Family Charge table.
The 2024 Budget Address was enacted on 26 December 2023 and thus the legislation and the impact on payroll will become effective on 1 January 2024.
Limited changes were made to the tax tables:
The increase in the exempt threshold as well as the reduction of the highest income tax bracket will benefit all employees, and their net income will increase marginally.
The National Pension Scheme Authority is mandated to review the contribution ceiling and pension payments annually and adjust them in line with any change in the National Average Earnings (NAE).
This is in accordance with Section 35 of the National Pension Scheme Act No 40 of 1996. The NAE figure for 2024 has increased to K7,454.00 from K6,710.00 in 2023 as determined by the Zambia Statistics Agency.
Accordingly, on 4 January 2024, the National Pension Scheme Authority advised that the maximum monthly employee contribution for the year 2024 has been revised to K1,490.80 from K1,342.00- an 11% increase. Given that the employee and employer both contribute 5%, the maximum total monthly contribution will increase to K2,981.60.
The upward adjustment to the ceiling will increase the contributions of most employees and concomitantly have a direct impact on their net pay.
Currently, employers are required to pay 0.50% of the employee’s social security base to the Agence Nationale pour la Promotion de l’Emploi (the Employment Promotion Agency or ANPE). This government organisation is responsible, among other things, for jobseeker placements and contribution to the development and implementation of a national employment policy, through the implementation of programmes of integration and reintegration of the unemployed
In accordance with Decree No. 2023-258/P/CNSP/MFP/T/E of November 3, 2023, which modified and supplemented Decree No. 2002-277/PRN/MFP /T of November 29, 2002, employers in the para-public and private sectors are informed that the rate of the employer contribution has increased from 0.5% to 1% of the payroll, from 1 January 2024.
The contribution is recovered by the National Social Security Fund (CNSS) according to the same terms as social contributions.
This contribution is only made by employers and as such, there will be no impact on employees. It will however increase the employment cost for companies.
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