Ivory Coast-Taxation: the employers and the government against the industrialists

The Ivorian employers during the presentation of the fiscal year 2019.

Three years ago, on December 31, 2019, the Government of Côte d’Ivoire set the last time a special tax was introduced to equip the General Tax Directorate, and the Ivorian government seems to be eager to rebel against the great dissatisfaction of the companies that are subject to it. for eighteen years now.

Created in 2001 to finance, over a fixed period of three years, the investment program of the general direction of the taxes (Dgi) of Côte d’Ivoire, the special tax of equipment (TSE) does not finish to be imposed on businesses. The end of its application, many times adopted, plays the Arlésienne, maturity after maturity. The back-pedaling in the matter, worth, on a purely financial plan, his weight of billions of FCFA.

A manna of over 25 billion FCFA that we do not want to deprive …

Indeed, year in year out, the TSE reports to the tax authorities, on average 13 billion FCFA. “In 2018, the tax generated about 17 billion. Revenue for 2019 is expected to exceed 20 billion, by the end of July it had already brought in about 13 billion, “the ministry delegate to the prime minister in charge of the budget and state portfolio said. However, we remain surprisingly silent on the fact that the revenue forecasts for 2020, in case of maintenance of the tax, count on “more than 27 billion FCFA and at least 30 billion for 2021”. A manna we want to see definitively devoted. And the tax administration is the only one to cherish this wish!

… and the bosses assume to “play” against the interest of its members, for that!
As strange and astonishing as it may seem it is “the General Confederation of Enterprises of Ivory Coast (Cgeci), the Ivorian employers, who is the maneuver for the perpetuation of the TSE” rubs his hands at the level of the Tax Reform Committee of the Ministry in charge of the budget. And for good reason, since 2007, a third of the revenue of the TSE is donated annually to Cgeci. “It is on average, 4 to 5 billion CFA francs, which are thus donated each year to the Cgeci, which has full management, supposedly for the benefit of the entire private sector,” noted a member of the committee. This state of affairs is totally assumed at the Cgeci level. One of the directors of the Ivorian private sector umbrella assures, for this purpose, that “even in advanced countries tax levies are levied on enterprises to finance their employers’ organization”.

Risk of bronca on the horizon

Thus, with the support of the Ivorian Employers’ Board, the Ivorian government is planning, in the draft Tax Schedule 2020 “to repeal the deletion of the TSE” in favor of “an extension of the application of the tax without limitation of duration “. This prospect does not please the Ivorian industrial sector which, for the moment, contains its discontent. “We want to believe that the state will not be discredited by playing dubiously to trample on a tax commitment made to relieve companies of a questionable and dubious tax burden” vituperates the head of a company of packaging. It can not be ruled out, therefore, that the entry into force of a tax schedule to the 2020 finance law securing the TSE gives rise to a “bronca” of industrial companies.

Such a contestation situation would be the worst effect for the government. 2020 being an election year in Ivory Coast! But in addition, the perception of the general business environment by economic operators, translated through the competitiveness index of the country, is not the most attractive. The country recently lost four places to rank 118th / 141 countries in the Global Competitiveness Index of the World Economic Forum (WEF). The reliability and credibility of the institutions, the quality of the infrastructures, the level of education, the capacity for innovation, the financial system being some of the indicators which, in the eyes of the economic operators remain questionable!


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