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Indirect Taxes

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The value added tax (VAT) system, which came into effect on 41h July 2002, largely replaced the  old  business tax  system of  commodity and service taxes  including the  sales tax  and the  withholding tax. The VAT rate is 15% of  the  value of  every taxable transaction by  a registered person and all imports  of goods and services other than  those  exempted. Taxable transactions which shall be charged with zero  percent  are: export of  goods or  services   to  the  extent provided in  the regulations, the rendering of transportation or other services  directly connected with  international  transport of  goods or  passengers as  well  as  the  supply   of lubricants and other consumable technical  supplies   taken on  board  for consumption during international flights.

Excise tax is payable on a range of consumer goods, whether locally produced or imported, e.g.,  alcohol, tobacco, salt, fuel, television sets, cars,  carpets and toys. Its rates  vary  from  10% on receivers, garments and textiles  of any  type and fabrics to  100% on  perfumes, vehicles above 1,800 cc and alcoholic drinks. It is payable in addition to VAT.

All income from  domestic or foreign sources  is taxed whether it is obtained  as remuneration, profit or gains, from employment, business activities or any  activity which brings income to the beneficiary.

For depreciation allowance, assets are  categorized into  different classes.  The categories and rates of depreciation are:

  • Buildings  and structures 5%;
  • lntangible assets 1 0%;
  • Computers, information systems, software   products and  data   storage equipment 25%; and
  • All other business assets including automobiles, buses and minibuses 20%.

Every  investor  has  a  tax  obligation and is required to  obtain a  tax  payer identification number ("TIN").

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