Diversity Of VAT Laws Make Compliance Difficult For Multinationals

The multiplicity of Value Added Tax (VAT) systems across Africa exposes multinational companies to tax risk, errors and inconsistencies in the application of the law, according to a new report issued recently by Professional Services Firm PwC.

Most of Africa's 54 countries have VAT systems in place which foreign investors and businesses cannot afford to be ignorant about, according to PwC's report entitled an Overview of VAT, 2011.

Taiwo Oyedele, Tax Partner, PwC Nigeria, says: "A potentially lucrative deal in Africa can easily turn sour if the parties do not take into account the potential liability for VAT registration or the basic structure of VAT in the relevant country."