A directive that requires excise tax collectors to stamp their merchandise is drafted by the Ministry of Finance (MoF). Additionally, the directive enforces that importers or producers create a system that interfaces with the tax office.
The excise tax proclamation 1186/2020 is the basis for its drafting, according to the directive that was released for comment.
Article 29, sub-article 1A of the 2020 proclamation stated that the MoF may, by directive, specify the excisable goods to which excise stamps shall be affixed.
According to the draft directive, spirits, tobacco, bottled water, alcoholic and non-alcoholic beers, cigarettes, and cigarillos must all have the excise stamp applied.
It added that the ministry shall include other goods.
According to experts, the ministry made the decision to issue the directive because it believed that all relevant importers and manufacturers were not correctly complying with tax collection requirements. They informed Capital that “it is also part of the implementation of expanding the tax base.”
The excise stamp shall be a paper stamp, digital stamp, or any mark that the Minister may approve for affixation or printing on excisable goods.
The draft directive stated that the Tax Authority shall specify the type, content, and the manner of affixing excise stamps.
According to the draft law, a manufacturer or importer of excisable goods shall apply to the Tax Authority for excise stamps in the prescribed form. “An application for excise stamps in accordance with sub-article 1 of this Article shall be submitted to the Tax Authority at least sixty days before the manufacture or importation of the excisable goods.”
The directive stated that the ministry shall appoint a company to carry out the printing and supply of excise stamps, to develop and install the system, and to install any other related systems.
It added that the excise stamps shall be affixed to manufactured goods at the production facility immediately after packaging and at the customs post or at a place determined by the Tax Authority within five days of the clearance for importation of the goods.
It added that the Tax Authority may allow excise stamps on imported excisable goods to be affixed at the production facility in the exporting country in accordance with such conditions as the Tax Authority may specify.
According to the directive, a manufacturer or importer of excisable goods shall facilitate the installation of the system, like excise stamps authentication and validation equipment, devices for identification and association of each package with an individual excise stamp, production accounting equipment, and devices for the control, registration, recording, and transmission of data on quantities of excisable goods which have been stamped to the Tax Authority.
“All packages of duty-free or export excisable goods specified in the proclamation shall bear distinct markings to enable the goods to be trackable and traceable,” the directive added for commodities that have duty-free incentives.
Article 39, sub-article 6 of the proclamation stated that any person who contravenes Article 29 of this Proclamation, which provides about excise stamps, commits an offense and is liable if convicted to imprisonment for a term of 3 to 5 years and a fine of 50,000 to 100,000.
New excise stamp directive implemented to enhance tax compliance
Debt service set to surpass social spending
By Muluken Yewondwossen
Over the next five years, debt service will overtake financial spending on essential social sectors in Africa.
Africa is currently facing a financial crisis as a result of the continent’s foreign debt growing by nearly four times during the previous 20 years.
The African Forum and Network on Debt and Development’s (AFRODAD) policy analyst and advocacy officer for sovereign debt management, Shem Joshua, stated that if there is no way out, the continent’s debt service payments will only increase over the next five years.
According to the UNCTAD analysis, he said, there would be more money spent on debt servicing between 2025 and 2030 than on funding initiatives to improve health, education, and other social sectors.
At last week’s AFRODAD Media Initiative, he stated, “It has an impact when it compares with some of the development agenda that African economic considers as the expenditure for debt repayment increases and education expenditure reduces.”
The question of whether countries are collecting money to pay off debt or to expand their economies is raised by the growing amount of debt to GDP.
He displayed the debt position of a few African nations, saying that between 2019 and 2023, the average debt to GDP ratios for Egypt, Sudan, Tunisia, and Morocco were 86, 198, 83, and 70%, respectively, and above 100% for the Democratic Republic of the Congo, Zambia, and Mozambique.
Joshua claims that of Africa’s USD 238 billion (dollars) in debt at the beginning of the 2000s, less than one-fifth was owing to private creditors.
Africa has a total debt of USD 1.13 trillion (trillion dollars) as of 2024, a 375 percent rise from 2000 to 2024. Private creditors account for the majority of Africa’s debt. He went on to say, “Private creditors have become important financing sources for African countries in recent years as governments are able to circumvent loan conditions associated with debt owed to bilateral and multilateral creditors.”
The low interest rates that were prevalent at the time, which encouraged African countries to borrow, are reflected in the rapid increase in debt held by African governments between 2012 and 2019.
Subsequently, governments have to drastically reduce their spending, frequently despite declining tax collections.
Between 2000 and 2023, there was a significant increase in the continent’s gross government debt relative to general government revenue.
This disparity has made it difficult for governments to determine how best to use revenue to pay down debt while also allowing for economic development.
He highlighted the financial bottleneck the continent faces by saying, “If eight or nine dollars of every ten dollars we collect in revenue go toward debt repayment, then can we develop our economy by the remaining one or two dollars?”
“Public borrowing is vital for bridging the financing gap in African economies, given that on average, domestic revenue is about 18 percent of GDP in Africa. However, for low-income countries, the average is about 12 percent of GDP.
The average domestic tax collection rate in African nations is between 10 and 15 percent, while 60–75 percent of the continent’s economy now operates in the informal sector.
“We do not support raising taxes on citizens since very few people pay taxes, regardless of where we are in Africa. Since the majority of our economies are in the informal sector, we are looking to increase the tax base,” he continued.
“What are some tools that the government is putting in place to make sure that we can service our development agenda without depending on developed economies?” he asks, emphasizing potential solutions to be considered when the development initiatives are completed.
“There’s a problem when we cut back on health or education spending while raising the debt service,” he continued.
He brought up a UNCTAD analysis that predicted that between 2025 and 2030, more than half of Africa’s economy will be used to provide for debt service compared to GDP, surpassing fundamental needs in the areas of health, education, and other social sectors.
The expert asserted, “Africa is in a debt crisis, and the worst scenario is that the developed economies will have to bring the solution to the continent.”
He expressed disapproval of the fact that the majority of debt restructuring plans include conditions that might negatively impact a nation’s economic stability.
Low-income nations were able to temporarily suspend part of their debt payments under the COVID-19 Debt Service Suspension Initiative (DSSI), but not all creditors were required to comply.
As a result, the G20 Common Framework was established to restructure the debt of these countries.
Only two nations and four countries, Ethiopia, Zambia, Ghana, and Chad, were involved in the debt restructuring. Although Zambia and Chad were able to come to an agreement, it took more than two years to see any tangible results due to the conditions, some of which would require austerity measures from the creditors.
United Nations Mission in South Sudan (UNMISS) supports the People of Maiwut in Creating New Business Opportunities
In Maiwut, a county in South Sudan’s Upper Nile state, the delicious aroma of freshly baked goods emanates from a building, attracting passersby.
In traditional ovens, busy men and women bustle through the process of making bread and mandazi, a sweet offering often referred to as a fried African doughnut.
Some are responsible for preparing the dough, others for baking the bread, and a third group transports delectable items to the market for selling.
This bakery – a joint skill-building initiative by the United Nations Mission in South Sudan (UNMISS) and Save a Life International, an international nongovernmental organization, supports 60 people—30 men and women—some of whom have returned to Maiwut from Gambella refugee camp in Ethiopia.
The endeavour aims to ameliorate some continuing challenges such as lack of healthcare facilities, limited access to education, and negligible employment opportunities that affect residents and returning populations alike.
According to beneficiaries, the impact has been tangible.
“I was idle at home and finding it extremely difficult to make ends meet,” revealed Nyaruot Tongyik, one of the women working at the bakery.
“But now, I’m gainfully employed and make enough money to support my family. It’s been extremely good for my mental health and enabled me to educate my four children. Someday, I hope to start my own business,” she added with a smile.
For Nyachua Bim, the sole provider for her family, and a recent returnee to Maiwut, the bakery means a lot.
“Last year, I returned to Maiwut with my children, but I found it near impossible to get a job. But thanks to this initiative by our international friends, breadmaking is my new passion and my primary source of income,” she explained, beaming.
The smells and tastes of freshly baked bread in the market have also energized people during their regular grocery runs.
“I love this bread! It’s so tasty. I always arrive at the market before 4 p.m. because they sell out within a few minutes,’ says Chuol, a resident of Maiwut town.
James Mwangi, Executive Director of Save A Life International, recounts training this dedicated group of new bakers for two months.
“Last year while actioning a similar project in Melut, we discovered that many parts of Upper Nile state were experiencing food shortages, including that of staple items such as bread. That’s when we partnered with UNMISS and provided intensive training here in Maiwut to this committed group. It’s very rewarding to see them thrive,” he reminisced.
Both individual households and restaurants are regular clients for these baked delights, a fact that gives the group confidence to continue their business, though the initial UNMISS funding for two months has now ended.
“I sell bread in Maiwut’s market and enjoy the interaction with people who now approach us for bread-making training because there’s a very high demand for what we make in the market. I am optimistic that we will be a self-sustaining business,” stated Nyadieng Jock, another baker.
Picking up on the last point, Alfred Orono Orono, Head of the UN Peacekeeping mission’s Field Office in Upper Nile, emphasizes the need for communities to be at peace to achieve economic stability.
“UNMISS allocated resources to create this business, but ultimately it is community-owned. Each member plays a crucial role, making the project successful and sustainable,” he averred.
The bakery is part of the UNMISS Quick Impact Projects (QIPs) programme administered by the Protection, Transition and Reintegration Section that seeks to action small-scale, low-budget interventions to fill urgent public needs.
Distributed by APO Group on behalf of United Nations Mission in South Sudan (UNMISS).
Vantage Capital invests R346m into Procera Group
Vantage Capital (www.VantageCapital.co.za), Africa’s largest mezzanine debt fund manager, announced that it has made a R346m investment into Procera Group (Pty) Limited (“Procera”), a leading South African business process outsourcing (BPO) services provider serving both South African and international clients.
Vantage’s investment comprises of the acquisition of a significant minority equity stake from the Procera founders as well as the provision of a mezzanine facility to support future strategic acquisitions by Procera.
Founded in 1990 as a debt recovery solutions provider, over the last three decades Procera has evolved into an integrated BPO services group offering support solutions to its clients via several distinct brands along the customer life cycle. Procera currently services over 50 local and international blue-chip clients across key industries such as Retail, Financial Services, Energy and Telecommunications in geographies including South Africa, Namibia, United Kingdom, United States and Australia.
Procera’s investment into its proprietary contact centre software, deployment of emerging technologies such as predictive analytics, generative AI and omnichannel communications continue to improve productivity and the customer experience. With over 2700 employees, Procera is a significant driver of impact through employment, training and skills development, especially for women and youth in the communities within which it operates.
South Africa is consistently ranked in the top two BPO locations globally driven by factors including customer experience supported by an empathetic English-speaking workforce and cultural affinity to various source markets, a favourable time zone, and its abundance of youth talent. The South African BPO market is expected to achieve a 13% CAGR over the next five years ahead of global growth forecasts for the sector of 8.5% CAGR. The sustained global growth is driven primarily by corporates seeking to effectively manage costs and streamline business functions.
Roshal Ramdenee, Associate Partner at Vantage Capital, said “Vantage sees a tremendous opportunity for both job creation as well as a positive economic impact as Procera continues its rapid international expansion and drives market leading technological solutions in the BPO space. Vantage is proud to partner with a very capable management team and committed long term investors.”
Warren van der Merwe, Managing Partner at Vantage Capital, added “It is rare in the current economic environment to find fast-growing South African businesses and ones that are truly competitive in developed markets. Procera’s founders, shareholders and management team have built an admirable business to date, and we are excited to invest into Procera’s next stage of growth and development.”
Crispin Sonn, Chairman at Procera added “We are very pleased to have the long-term support of Vantage and its team of seasoned investors as we look to grow the Procera’s business services footprint into international markets.”
PWC acted as financial advisor to the transaction, Werksmans acted as legal counsel for Vantage. Other advisors to the transaction included Step Advisory, Ernst and Young, Webber Wentzel, Eversheds, STBB, and IBIS Consulting.
Distributed by APO Group on behalf of Vantage Capital Group.
For more information contact:
Warren van der Merwe
Managing Partner – Vantage Capital
warren@vantagecapital.co.za
+ 27 (0) 11 530 9100
Roshal Ramdenee
Associate Partner – Vantage Capital
roshal@vantagemezzanine.com
Darshan Shah
Senior Associate – Vantage Capital
darshan@vantagecapital.co.za
About Vantage Capital:
Vantage Capital Group was established in 2001 and is the largest independent pan-African mezzanine debt fund manager on the African continent. It has raised funds of US$ 1.6 billion in seven distinct mezzanine and renewable energy debt funds as well as in a technology fund and has to date made 61 investments across the African continent.
Vantage has an office in Johannesburg, employees based in Cape Town, Nairobi, Lagos, Cairo, London, Dubai and Paris, and targets investment opportunities, with a focus on mezzanine debt, of US$ 10 – 50m across more than a dozen key African markets. Mezzanine debt is an intermediate form of risk capital, which is situated between senior debt, the lowest risk tranche of the capital structure, and equity, the highest risk. It combines elements of both debt and equity thereby providing companies with long-term funding on terms which are less dilutive to shareholders than pure equity.
Vantage recently launched an education investment platform which is targeting the education markets of Poland, Czechia, Romania, and Portugal.
Website: www.VantageCapital.co.za
