- Income tax on businesses and real estate profits alongside other aspects of personal income tax are expected to be key areas of change expected.
The agenda is set for the Sudanese Tax Administration, especially for the coming year 2023 as the Ministry of Finance and Economic Planning recently approves the proposal to amend the income tax on businesses and real estate profits.
The proposed amendment will also reach the personal income tax entirely regardless of the revolts from the public domain on the ever-increasing tax rates, especially in recent times.
Channelling efforts to improve Sudanese revenue generation, unifying tax laws, eliminating discrepancies in wages and more are some of the areas expected to see improvement in the coming year for the Sudanese economy.
Sudanese Tax Administration: Trajectory to the Decision
The decision of the government to review tax provisions next year came from the need to improve the economy after the nation’s Chambers of Commerce Federation, CCF requested an urgent review of the nation’s economic policies amid the increment of taxes on the profit of businesses.
The leadership of Sudan’s Chambers of Commerce Federation further submitted that the criticality of ensuring a review of tax laws is due to the reduction experienced in the profits of businesses causing a reduction of purchasing power and a negative impact on the gross domestic product.
In response to the professional body, the Ministry of Finance led by Jubril Ibrahim recently submitted that the ministry single-handedly cannot reduce tax rates payable by businesses unless they are approved by the Council of Ministers.
To buttress the powers of the Council of Ministers, recall that recently the council had abolished the production tax linked to industrial products following complaints from players in the sector.
In the minister’s words;
“If the problem is in the method of tax assessment, it must be addressed and reviewed,” he said.
Recall also that recently, merchants across major markets in the country like the Shendi Grand Market in River Nile state embarked on a 2-day general strike as a response to what the tagged ‘exorbitant taxes’ recently announced by the Ministry of Finance.
The Government’s Rationale
It has been a busy period for the Ministry of Finance especially in explaining its rationale for upwardly reviewing tax rates on the profit of businesses.
The leadership of the Finance Ministry submits that the recent move by the government is out of the need to expand the tax umbrella, increase tax revenue and combat tax evasion.
Also, the ministry had submitted that the quest to take taxation serious is due to Sudan’s lack of external support in funding its annual budget for the second year in a row.
It is important to note that since the military takeover in Sudan on October 25 2021, international donors had suspended financial aid to Sudan. This development, saw the North African country lose a whopping sum of $4.4 billion in support.
The World Bank and International Monetary Fund have also warned that if nothing out of the ordinary is done, the Sudanese economy will be heading for doom.
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