Trade blocs in
Africa: a road map
to real integration
Panel
Moderator
Panel
Hadijah Nannyomo
Johan Van Niekerk
Olebogeng Ramathlodi
Senior Manager
Indirect Tax
EY Kenya
Africa Trade Compliance Manager
Cummins Africa
Senior Manager
Indirect Tax
EY South Africa
Wim Hoogedeure
Marcus Stelloh
Partner
Performance Improvement,
Advisory
EY South Africa
Senior Manager
Transfer Pricing
EY South Africa
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Africa Tax Conference™ 2015
Agenda
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About regional trade blocs
About supply chains
About transfer pricing
Scenarios and way forward
Conclusion
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Africa Tax Conference™ 2015
About regional trade blocs
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Different regional trade blocs have the primary aim of economic cooperation, removal of tariffs and
barriers to trade
Common Market for Eastern and Southern Africa (COMESA); Southern African Development
Community (SADC); Economic Community of West African States (ECOWAS); East African
Community (EAC); Southern African Customs Union (SACU); and Central African Economic and
Monetary Community (CEMAC) are some of the regional blocs in Africa
Economic integration process takes the following stages:
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Preferential trade area (PTA)
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Free trade area (FTA)
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Customs union
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Common market
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Monetary union
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Political federation
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Africa Tax Conference™ 2015
Why regional trade blocs?
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About supply chain management
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Africa Tax Conference™ 2015
Transfer Pricing and Customs
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Fundamental inconsistences between transfer pricing (direct tax) and customs audits
approaches creates double taxation risk
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Differences in transfer pricing and customs approaches to valuation:
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Comparison between transactional transfer pricing methods and customs valuation methods
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Period of scrutiny: fiscal year (transfer pricing) versus transactional (Customs)
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Basis: profit-based (transfer pricing) versus transactional or cost-based (Customs)
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Definition of related parties: different standards, additional scrutiny for customs
Transfer pricing adjustments:
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Downward transfer pricing adjustments - can customs refund be obtained?
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Upward transfer pricing adjustments - is additional duty payable?
Toward consistency - World Customs Organisation Guide to Customs Valuation and
Transfer Pricing
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Africa Tax Conference™ 2015
Considerations
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How can a business with presence in 15 African countries and 3 trade blocs
benefit from regional integration?
Globalization and the emergence of trade blocs have created different supply
chains. What are the implications in developing supply chain strategies, and
how are supply chains modelled across the regional trade blocs?
How should businesses deal with limited harmonization between customs
authorities and tax authorities in Africa?
To what extent have regional blocs resolved tariff and non-tariff barriers? What
is next?
Trade blocs in Africa will become a reality…. as they did in the European
Union.
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Africa Tax Conference™ 2015
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