Are there any transitional social security measures to mitigate the impact of COVID-19?

Yes. To the best of our knowledge, the only transitional social security measure approved in Equatorial Guinea to mitigate the impact of COVID-19 in the Country was enacted by Decree 43/2020 and consists on the Ministry of Finance attributing a 100% bonus applicable to social security quotas until 30 September 2020 to food distribution and marketing companies, as well as to those that hire new employees to comply with the measures adopted by the health authorities. Yet, as far as we can determine, this measure only applies to the aforementioned companies in the aforesaid conditions, and provided they qualify as SMC.

 

Are there any transitional tax measures to mitigate the impact of COVID-19?

Yes. To the best of our knowledge, the only transitional tax measures enacted in Equatorial Guinea to mitigate the impact of COVID-19 in the Country solely apply to SMC (save for those that charge for the provision of services to any institution of the Public Sector), as per Decree 43/2020. These measures are as follows:

  • The deadline to voluntarily pay minimum corporate income tax regarding 2020 is extended until June and the rate is reduced from 3% to 1.5% until 30 September 2020; and
  • The deadline to voluntarily pay corporate income tax regarding 2019 is extended until July 2020 (this measure may not apply entirely to the oil & gas sector; for more details please see our chapter on the impact of COVID-19 on the Oil & Gas Industry).

 

Are there any transitional incentives to mitigate the impact of the COVID-19?

Yes. To the best of our knowledge, the incentives approved in Equatorial Guinea to mitigate the impact of COVID-19 in the Country include:

As per Decree 43/2020:

  • The creation (as a State Budget-related measure) of a framework that allows certain companies to set-off credits with the State;
  • The creation of a special unit for the promotion of public-private partnerships and basic public services (including provision of water, sanitation, power and telecommunications);
  • As a State revenue-related measure, an incentive to taxpayers that resort to a special filing mechanism to settle tax debts that will be created by the Ministry of Finance; and
  • In the case of SMC, the following incentives:
    • A new governance structure of a Partial Guarantee Fund will be put in place by the Ministry of Trade and SMC working with the Ministry of Finance, to guarantee the efficiency, transparency and objectivity of the allocation of its resources;
    • A strategy to reduce the costs with power of SMC will be put in place by the Ministry of Industry and Energy working with the Ministry of Finance and SEGESA;
    • A strategy to reduce the costs with internet services of SMC will be put in place by the Ministry of Transportation, Post-Offices and Telecommunications working with the Ministry of Finance and private operators;
    • A strategy to repay the financial credits of SMC will be put in place by the Ministry of Finance working with the Professional Association of Credit Institutions and micro finance representatives; and
    • For the duration of the restrictions to fly over national airspace, companies that lease public trade shops at the Malabo and Bata International Airports are exempt from paying 50% of the monthly rent established in their contracts.

As per Ministerial Order 2/2020:

  • Bars, discos, casinos and those public businesses that were completely prevented from opening their doors due to the State of Alarm, as well as minor consumers - i.e., with monthly power invoices not exceeding fifty thousand (50,000) CFA francs (approximately US$ 83) -, will benefit from a fifty percent (50%) reduction on their power bill;
  • Hotels and restaurants must implement measures to diminish the use of power and will benefit from a twenty-five percent (25%) reduction on their power bill;
  • SMC and average consumers with monthly power invoices ranging between fifty thousand (50,000) CFA francs (approximately US$ 83) and one hundred and fifty thousand (150,000) CFA francs (approximately US$ 250) -, will benefit from a twenty-five percent (25%) reduction on their power bill;
  • All hotels designated by the Government to shelter people undergoing quarantine in compliance with Decree 42/2020 will not bear costs with power; and
  • SEGESA is yet again asked not to cut the power of its clients during the State of Alarm in Ministerial Order 2/2020.

As per an Oder that we understand that the Ministry of Mines and Hydrocarbons announced on 4 May 2020 that it has passed:

  • Oil&Gas exploration companies in Equatorial Guinea are granted a two (2)-year extension on their exploration programmes;
  • The Ministry of Mines and Hydrocarbons will ensure flexibility on the work programmes of producing companies to ensure growth and stability in the market; and
  • The Ministry of Mines and Hydrocarbons will continue working with oil companies benefitting from such incentives to make sure that the recovery of Equatorial Guinea’s oil sector is made through local content promotion, increased technology transfers and procurement of additional local goods and services (particular emphasis being put on educating, training and promoting local workforce to help further reduce operational costs for international companies while maximising the creation of local value and revenue)

In accordance with Order 1/2020, of 13 April 2020, of the Ministry of Mines and Hydrocarbons, that envisages that, when the Country recuperates from the impact of this outbreak, the creation of national employment and the strengthening of local content are favoured, the hiring of national employees in Equatorial Guinea’s oil and gas industry is fostered, by limiting to three (3) years the period during which companies may employ foreign citizens in said industry.

Finally, taking into account the current status of the oil and gas industry due to the COVID-19 outbreak, its diversification through the development of oil refining and distribution activities are (at least) rumoured to be seen by the Ministry of Mines and Hydrocarbons as the next step to boost the industry in the Country.

 

Are there any transitional measures concerning pre-existing incentives to mitigate the impact of COVID-19?

To the best of our knowledge, no. 

 

Are there any transitional measures applicable to self-employed persons to mitigate the impact of the COVID -19?

To the best of our knowledge, no.

 

Are there measures regarding the interaction between taxpayers and the Tax and Customs Authority due to the impact of the COVID -19?

Yes. As mentioned above, to the best of our knowledge, the measures approved in Equatorial Guinea to mitigate the impact of COVID-19 in the Country are contained in Decree 43/2020. The following measures regarding the interaction between taxpayers and the Tax and Customs Authorities due to the impact of the COVID -19 are included:

  • The Ministry of Finance will create a special filing mechanism to settle tax debts and offer special incentives to taxpayers that resort to said mechanism; and
  • The Ministry of Finance will make the use of the SIDUNEA (i.e., the United Nations Automatic Customs System) mandatory in Malabo.

We also note that Decree 43/2020 sets forth, as a State revenue-related measure, that the Ministry of Finance and the Ministry of Mines and Hydrocarbons must negotiate with companies carrying out activities in the oil sector the settlement of any tax debts assessed in connection with fiscal year 2019 before the end of the month of April 2020.

 

 

__________________________

This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.