Challenges Facing Transfer Pricing Regimes In Africa

Transfer Pricing (TP) has been a part of the tax regimes in various African countries for several years with countries like South Africa, Kenya, Ghana and Nigeria introducing TP regimes over a decade ago. During this period, these countries have witnessed some growth in the implementation of TP and the compliance level of taxpayers. TP principles have become important tools for tax authorities to continue to protect their tax base as the correct implementation will ensure that appropriate returns are earned and taxed where value is created.

Despite the significant progress made in the implementation and development of TP regimes in Africa, there are still some challenges being faced by tax payers and authorities. To ensure the continuous development of the TP regimes in Africa, it is important that these challenges are identified, discussed and addressed. Thus, this article highlights some of the challenges being faced and suggestions on managing them.