Togo adopts new tax code to attract investors and boost businesses
Tuesday, 13 November 2018 10:32 
(Togo First) - Last Friday, Togo’s parliament adopted a new general tax code. The new regulation replaces a 25-year old one which has been amended multiple times over the years, as new issues emerged, both in the country and worldwide.
Number of taxes imposed slightly reduced
The new code suppresses some taxes which used to make things harder for firms, harmonizes collection with neighboring countries, and encourages those operating in the informal sector to regularize. These aim to boost tax base which is still strongly dependent on consumption (consumption taxes contribute nearly 80% of tax earnings).
The new code not only draws “a distinct line separating tax base regulations and tax procedures, but also emphasizes on taxation guidelines,” said Sani Yaya, Minister of finance.
Among the new guidelines, there is the “rationalization of the tax system’s structure with new rules to determine earnings per category, reducing corporate tax rate from 28% to 27%, and progressively eyeing 25%, as required by WAEMU”. Around VAT, there is also an indirect tax introduced through “the implementation of a VAT loan reimbursement mechanism, in line with the best practices, and the introduction of a more open synthetic tax for the benefit of SMEs”.
The new code indeed is quite favorable to companies, SMEs especially, as it cuts down many taxes. The latter include taxes on wages, on official vehicles, and taxes complementary to tax on income and wage, surcharge levied on poorly exploited land properties and special tax on drinks manufacturing and sales.
Boosting tax revenues
Through this reform, the government aims to significantly increase tax revenues while developing one of the region’s most attractive business environments.
While tax revenues are still too weak to cover its budget expenses, Togo, by creating a tax revenue office, has succeeded in slightly raising its tax collection level, compared to 2014. According to an OECD study assessing 16 African nations, Togo is the nation that improved the most in terms of tax collection.
Fiacre E. Kakpo
