Togo: Government announces major reform of general tax code for 2019

Economic governance
Saturday, 03 February 2018 16:44
Togo: Government announces major reform of general tax code for 2019

(Togo First) - During the last ministers’ council, held on Febuary 1, 2018, the government has adopted a bill on the new tax code.
According to the minutes of the meeting, the need to reform the general tax code is to be attributed to a number of reasons; the main one being that Togo’s general tax code which results from a law passed on December 30, 1983 and has been amended repeatedly, has become obsolete. This also is due to the emergence of new challenges related to taxation, especially when it comes to improving business climate.
The proposed reform will focus on many aspects and follow some guidelines, the council of ministers said.
First of all, corporate tax will decrease from 29% to 27%, and progressively to 25% which is WAEMU’s standard. Presently, this figure is at 28%.
The announced reform also fosters indirect taxation, which is based on VAT and excise duties whose neutrality is reinforced by the organ for VAT loan repayment, in conformity with good practices.
Also, aiming to downsize informal sector’s weight in the economy, the adopted bill plans for tax incentives targeting small and medium enterprises. Among these, there is turnover-based taxing with rates of 8% and 2% for service providers and merchants, respectively.
SME and SMIs support will occur through the consecration of tax relief measures for tax payers overseen by Certified Management Centers (Centres de Gestion Agréés), and other public organs in charge of monitoring informal sector.
An incentive-based tax regime will also be established for SME and SMIs that are not covered by the new investment code due to the imposed level of investments.
The government also plans to broaden tax base to promote tax revenues collection and better finance State and local communities’ budgets.
Moreover, many taxes have been cancelled. These include: wage tax, company vehicle tax, additional tax on revenue tax, surcharge levied on poorly built properties, special tax on drinks manufacturing and sale, tax on road hauliers’ income. In addition, a new modality will be integrated in the new formula to compute business tax.

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