Since 2016, major companies have been able to declare their taxes online, on the website of the Revenue Office (OTR). In January 2017, it was the turn of small and medium enterprises (SMEs) and 400 of those were actually recently trained to e-declaration, last March to be exact.

This move, let’s emphasize, aligns first with the OTR’s will to make it simpler for Togolese firms to declare and pay their taxes, and secondly with government’s desire to modernize public administration and improve business climate.

Commenting on the e-declaration reform, the Business Climate Cell (CCA) said it would significantly shorten delay for tax declaration.

With e-declaration, Togo’s tax office should become more efficient and provide better services to taxpayers.

In the same framework, it should soon be possible to pay taxes via mobile, revealed Adoyi Esso-Wavana Ahmed, tax commissioner in an interview with Togo First.

Fiacre E. Kakpo

Adoyi Esso-Wavana Ahmed (photo), tax commissioner of the Togolese revenue office (OTR), product of the merger between tax and customs in 2014, provides an insight on various measures undertaken by his administration as well as upcoming ones. OTR has considerably helped boost the country’s tax earnings, recalling that these were barely above CFA400 billion in 2013.  

Togo First : OTR’s current focus is to achieve tax compliance. How exactly does it plan to do that?

ADOYI Esso-Wavana Ahmed (AEA): Considering that Togo’s tax system is based on self-assessment, OTR’s strategy is to promote a tax culture that allows people and businesses to adhere to its activities. The office will focus on teaching businesses about their declaration and payment obligations, as well as about tax and custom procedures. Additionally, the office intends to regularly collect data on tax and custom revenues, and continue raising citizens’ awareness concerning tax’s importance. The main goal is to get businesses and individuals to spontaneously declare and pay their taxes.

Togo First : It’s been three years since the tax and custom offices merged, in 2014. What is your review of OTR’s activities since then?

AEA : Indeed, since its creation in 2014, four years ago, OTR has produced some very encouraging results. For example, as compared to 2013, tax revenues soared by 39.5% in 2017. Also, tax revenue, which is the proportion of taxes in GDP, has exceeded 20% over the period. This is a reference in the region. All these achievements are attributed to the various reforms implemented as a result of the merger.

Togo First : Fighting corruption is part of the office’s missions. What measures are taken in this regard and what are Togo’s achievements in this framework?

AEA : OTR has done everything to develop a culture of integrity and fight against fraud and corruption. Various actions taken to fight corruption mainly consisted putting in place modern tools for prevention and investigation. Besides, the office wish to get each of its agent involved in the fight against corruption. I would like to remind that at OTR, we have a department that fully dedicates to fighting and preventing fraud and corruption.

We have also invested in programs that align with this objective, with all the tax system actors, and also to improve partnership between local and international partners such as CENTIF, the High Authority for Prevention and Fight against Corruption and Related Offenses, Anti-Corruption Maritime Network (MACN), the U.S. embassy near Togo, etc.

Togo First : Last year, the government started implementing a battery of measures for tax relief. How did this measures impact tax revenues?

AEA : These tax relief measures include :

• 10% cut on VAT (art 323 CGI, article 4 LOFI 2017) for commodity basket, affecting a number of products and services ;
• VAT exemption for sale and import of mobile handsets and IT equipment for end-users ;
• VAT reduction for basic commodities ;
• VAT exemption for car leasing activities ;
• Reduction of corporate tax from 29% to 28%.

Among these measures, those aiming to bring down prices of commodity basket did not have the expected effect, they did not fall. This led the government to revise some of these measures in 2018.

Meanwhile, measures aiming to ease SME’s access to funding and investments will in the medium term help boost the economy and at the same time make SMEs more competitive. They will lead to the broadening of tax base, thus contribute to a greater mobilization of taxes.

Togo First : Despite the many reforms initiated by OTR, some still claim it is discouraging  small businesses. What do you think of this?

AEA : Since OTR started operating, many actions and measures were implemented to benefit small businesses. These include:

• Sensitization of various companies;
• Public sensitization in markets ;
• A reform to ease access to financing;
• Reduction of fees for property access;
• Amendment of rules governing small businesses, with exemption of business tax during first year of activity ;
• Pedagogic visits to listen and answer issues of small taxpayers.

All these measures are paired with training workshops and open houses that back the various actions taken by the Delegation in charge of Informal Sector’s Organization (DOSI) to benefit small businesses. 

This year, an event was held to reward best taxpayers. Yet, there is more to do and OTR is well aware of that.

Togo First : This year’s State budget is higher. This implies, supposedly, more tax revenues, and falls in line with government’s goal to reduce its deficit and depend less on debt. Last year however, forecast for taxes revenues was scaled down. Do you think 2018 would be different, especially in the actual context marked by a political crisis?  

AEA : OTR trusts that the government will do what is needed to calm tensions, providing the required context for its development. This said, we will proceed with our activities.  

Togo First : What are OTR’s next projects ?

AEA : OTR main upcoming projects are :

• Promoting tax compliance;
• Promoting private sector;
• Modernization of management tools and procedures ;
• Reforming land sector;
• Simplifying general tax code ;
• Fighting fraud and corruption;
• E-payment;
• Mobile payment;

Another goal is also to improve collaboration between OTR and its partners such as local communities, public treasury, private sector, civic society, national documentation office, trade court’s registrar, CNSS, PAL, mobile operators, etc.

Interview by Fiacre E. Kakpo

Among reforms implemented by the business climate cell to make Togo’s business environment more attractive, there is the reduction of cost for construction permit.

The National laboratory for Construction and Public Works (LNBTP) has indeed in January 2018, the 10^th, reduced cost for soil survey from CFA900,000 to CFA350,000, before building a warehouse. Subsequently, construction permit’s cost reduced as well.

It should be recalled that the regulation in place states that no building should be built on inappropriate land, non-stable, erosion prone, flooding or in an unhealthy environment. The survey aims to make sure this does not happen.

Similarly to warehouses, survey conducted to build a house has also its price drop to CFA250,000.

In March 2018, a promotion actually took place and on this occasion, these prices were cut by 15%.  

At the end of 2017, Lomé’s court of first instance created commercial courts to handle minor conflicts involving sums ranging between zero and one million cfa.  

Via the decree n° 2699 I2OI7, the president of Lomé’s court appointed two magistrates to oversee these cases. This is to ensure they are rapidly processed.

The decree states that related hearings will be taking place every second and fourth of every Tuesday of the month, at the small hearing room at the commercial courts of the former Supreme Court.  

The reform aims not only to unclog commercial courts, by separating cases based on amounts involved, but also diligently process minor conflicts.

Moreover, it will improve traders’ trust in the legal system, a factor that is crucial in business environment and to attract investments in Togo.

DNCMP has released a note listing requirements that will be alleviated in the framework of the reform to provide 20% of public procurement to youth and women in Togo.

The document said that in regard to the requirement for a guarantee and a proof of financial ability, youth desiring loans will be backed by the national agency for the promotion and guarantee of financing for small and medium enterprises and industries, the national fund for inclusive finance (FNFI), and the fund for support to youths’ economic initiatives.

Also, no experience will be demanded for contracts to provide non-complex maintenance services. However, DNCMP advised interested entrepreneurs, starters to be exact, to team up with those with a minimum experience in these services.

Meanwhile, a minimum is required in terms of staff and equipment (leased), for recurring maintenance services.

As intellectual services are also included in the public procurement concerned, any youth or women desiring to secure such contracts will be asked a minimum such as a degree and qualified staff.

It should be emphasized that all these conditions and criteria do not apply to all procurements. According to DNCMP, they only apply to procurements financed by local resources, thus involving contracts which can be carried out by Togolese youth and women.