Viewpoint: Jean François Albrecht; Eric N’guessan
The Ivorian government has made it evident that it seeks to fast-track the coherent and complete implementation of an important tax reform, which the private sector has been waiting for since 2015. The objective is clear: the Ivorian economy must generate additional tax revenues to maintain the momentum of a more inclusive level of economic growth.
In this context, we must note that two discussions have been tabled by the employers’ association and the Prime Minister’s office. Indeed, the Fiscal Reform Commission, made up of representatives from the public and private sectors, and directed by the former tax director-general, had submitted a report entitled, “Fiscal and Customs Reforms to Sustain Côte d’Ivoire’s Development”. This report included 70 measures aimed at strengthening the performance of the tax system, in addition to improving the competitiveness and attractiveness of Ivorian companies.
The coordination unit of the fiscal policy charged with the re-examination of the recommendations began its activities by the second quarter of 2017. Work on reforms concerning the tax system for small and medium-sized enterprises (SMEs), patents and general income tax have been launched.
The fundamental question is whether the Ivorian government will be able to implement these reforms in an efficient manner, while also improving the perception of taxpayers and employers organisations. The heated discussions that occurred during the last finance law are a perfect example of this.
The implementation of fiscal reforms is a subtle balancing act which must consider various factors, including the impatience of the private sector, the sentiment of burdensome fiscal pressures and the absence of dialogue with the private sector.
Despite the convergence of fiscal pressures across UEMOA, and the requirements from partners and community legislations, the authorities remain optimistic in its prediction of more inclusiveness in the elaboration of fiscal laws, as well as a focus on the fight against fraud, the informal sector, greater control over taxpayer information and the identification of natural and legal persons.
Meanwhile, the tax authority is carrying out its action plan on the digitisation of procedures. Another area in which the decentralised tax offices must work is the broadening of the taxable base, including the taxation of SMEs, meaning companies with turnovers of under CFA1bn (€1.5bn) that employ fewer than 200 people. As per statistics from the Investment Promotion Agency in Côte d’Ivoire, SMEs represent 98% of all companies operating in the country. They generate over 20% of GDP, are active in all sectors of the economy and account for over 80% of created jobs. As is the case for other countries, SMEs are the backbone of our economy and act as key drivers of job creation.
Consequently, the development and bolstering of a strong SME sector, which is a generator of value and a provider of employment, especially for youth, becomes a precondition to achieving our objectives of becoming an emerging market by 2020. It is thus crucial to lift the numerous obstacles which hamper productivity, including a burdensome and aggressive tax policy; limited access to financing for the development and modernisation of companies; the insufficiencies of legislative and regulative texts; cumbersome and costly filing procedures; and the lack of incentives from the state.
As a result, the tax policy can be considered a double-edged sword which acts simultaneously as a powerful driver of SME development, while also being a regressive characteristic of the economy. We have proposed creating an agency which will be tasked with supporting and financing SMEs, as well as simplifying and digitising filing procedures, and reducing fiscal pressures through the adequate identification and taxation of the informal sector.
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