Togolese Prime Minister, Komi Selom Klassou, officially launched, on Jan. 30, Cellule Climat des Affaires (CCA)’s activities and proceeded to the opening of a workshop to validate the action plan for business climate’s improvement in Togo.
These activities include making proposals on actions/reforms to improve national indicators and keep improving business climate; putting in place practical measures for information exchange between responsible structures for reforms’ implementation and establishing a timetable to achieve and monitor the actions.
According to the official, CCA will pursue important reforms undertaken in recent years, including the reduction of costs needed to start a business and also that of related deadline for the process, facilitation of access to building permits and ownership transfer, reduction of electricity connection time, reduction of corporate income tax and payroll tax, as well as private-public partnership’s strengthening.

Waliyullah Tajudeen

A new pricing has been elaborated for foundation and soil studies. This has been revealed by a memorandum of the laboratoire national du bâtiment et des travaux publics (LNBTP), the public autonomous institution which controls the quality of infrastructures under construction in Togo.

According to the institution, the new pricing plan is aimed at “encouraging citizens to build on good soils, soils that meet current security standards”.

Its goal is to facilitate the installation of economic operators and local households. The new pricing plan is one of the vast reforms adopted by Togo’s government to improve and hasten the procedures to obtain building permits.

One of the most important reduction is the fees for the study of soils for the construction of a 1,300 m2 warehouse. Indeed, the fee was CFA900,000 but now it is CFA350,000 which represents a 60% reduction.

Furthermore, for soil studies for the construction of a ground floor type of household whose area is below 300 m2, the fee is CFA250,000. For this type of household whose area is comprised between 300 m2 and 600 m2, it is CFA300,000.

The fee for one or two-storey, it is set to CFA500,000. “Buildings of more than two-storeys and industrial type building will be studied on a case-by-case basis according to the norm NF P 94-500” which allows to set the claims among other things, the institutions explained.

Togo wants to become an economic hub in the sub-region. In that regard, government will put in place, as of this quarter, many reforms which are aimed at accelerating development of this African country whose private sector faces many challenges, and proceed to the automation of the issuance of urban planning deeds mainly. So, town hall and prefecture will be able to deliver first-class permits.

Fiacre E. Kakpo

Togolese Prime Minister, Komi Sélom Klassou, told a press conference at the business formalities center about new reforms undertaken by the government to facilitate business creation and improve business climate in the country.

Facing journalists, and major ministers, the official discussed mainly some major measures initiated by the government. Amongst these: minimum capital’s liberalization for LLCs, the President’s commitment to guarantee at least 20% of public procurement to young people with enhanced support and especially reforms related to the single window of the business formalities center.

“In addition to this promise about the 20% guarantee, the leader has also said that young people will benefit from streamlined procedures,” the Prime Minister emphasized. “It’s profound…really, it is an array of measures to accompany young people to be very efficient,” he added.

According to authorities interviewed by Togo First, launching a business has never been as easy as now. It is possible to create a business in less than 24 hours for CFA31,400. Also, it is now permissible to freely define the starting social capital for LLCs.

“Today, each young entrepreneur who desires to create its own business can freely set minimum capital to CFA25,000, CFA20,000 or any amount he wishes the starting social capital and even define social shares,” explained Sandra Johnson, head of Business Climate Unit (CCA).

Stephane Afidegnon, a young Togolese entrepreneur who has been operating in the informal sector for three years, assures that he formalized his business thanks to the incentives, especially to the procedure’s cost and delay. “What's good is that when we come for the first time, the following day, we get the business creation card. The cost is also very good,” he said.

In 2017, Togo registered 8199 new businesses, according to CFE’s data. This is a modest performance, attributable to political shocks that marked the second half of last year. But this year, authorities expect a rebound spurred by new reforms underway.

As of this year 2018, Togo economy will start benefiting from the numerous reforms initiated by the government.

According to the African development bank (AfDB), the reforms initiated to improve the business climate and support the private sector, the incentives measures for transfer of ownership rights notably, should help boost private investments in 2018 and 2019.

These private investments should increase by 2% in these years as it did from 2015 to 2017 and, they will reach 62% and 64% respectively.

Togo’s government is counting on the private sector to revitalize the economy which has been hit hard by the global fall in commodity prices. The declining tax revenues which resulted from this greatly affected budget balance. Since then, the government is trying to rely on two measures to fill the gap. These are the reduction of public expenses and incentives to encourage entrepreneurship. These initiatives seem to have been the basis for AfDB’s forecast which projects a strong growth of 10% for the private sector in 2018 and 2019.

Let’s note that according to Doing Business, in terms of transfer of ownership rights, Togo has advanced by 0.17% in 2017.

Fiacre E. Kakpo

Togolese government continues its reforms and, in this regard, has considerably lowered the cost of online legal advertisements. While it was CFA5000, it has been recently reduced to CFA1000, thus reducing by 80%.

Indeed, the government materialized a reform aiming to transfer to the business formalities center (CFE), exclusivity for legal advertisements on its website http://cfetogo.com/cfe/.

This reform aims to simplify access to information on existing companies in Togo. It is part of the major reform program initiated by the Togolese government, to improve business climate.

Still in line with its strategy to improve business climate, Togo’s government has announced tax incentives for companies registered at the Centre de Gestion Agréé (CGA).

Indeed, under its 2018 finance bill, article 1478, it provides tax incentives, not only to businesses registered under the single tax business regime but also to those registered under the real regime.

In effect, individual entrepreneurs or legal entities, registered at the CGA and subjected to the single business tax benefit from a 30% reduction on this tax, from the first to the third year of their activity, and 15% in the fourth and fifth years. This tax will be levied only starting from the sixth year of activity, the finance bill states.

In the same framework, Togo’s government granted entities subjected to the single business tax but that prefer real regime, a tax reduction which equals CGA registration fees and account management fees for five years, with a limit of CFA300,000 per year. However, charges taken into account under the tax reduction measure will no more be considered as deductible charges.

Besides, entrepreneurs with annual turnover ranging between thirty and sixty million CFA will benefit from the government’s kindness as well. Indeed, the latter plans to cut by 50% business tax from year 1 to year 3 of operation; by 30% income tax over the same period; by 20% alternative minimum tax during the second and third year of activity; by 30% business tax in the fourth and fifth year.

Moreover, the government, still under its 2018 finance bill, will reduce by 15% income tax during fourth and fifth years of activity; by 10% alternative minimum tax to be paid in the fourth and fifth years. Here also, the government will implement measures falling under the common law system, starting from the sixth year.

So, it appears that the government has walked half the way. Now let us hope that youth, and populations generally, will take hold of this opportunity and walk the other half.

In Togo, the number of firms established by private deed, that is without resorting to an authentic deed, has almost doubled, soaring from 947 in 2015 to 1339 in 2017 (+40%).

Last year, 76% of firms that were established were LLC (limited liability companies), against 54% in 2015. A boom fostered by the reduction of minimum share capital to create an LLC, to CFA100,000.

In addition, other incentives were initiated to improve business climate in Togo. Amongst these, cancellation of minimum capital required for LLC, reforms related to construction permits and transfer of ownership rights. All these fall in line with the government’s strategy to make private sector the economy’s driver.

Other reforms, it should be noted, have been announced, also to boost private sector. A sector which according to the African Development Bank (AfDB) should record a two-digit growth rate in 2018 and 2019.

Fourth country in the region to approve the creation of a firm by private deed, Togo still awaits the reform’s validation by World Bank.

Fiacre E. Kakpo

Last December 20, Togo’s parliament has approved the 2018 finance bill. The latter was amended slightly, in regards to taxes, compared to last year’s.

In fact, the government, this time, is betting on tax relief to efficiently tackle poverty, unemployment and boost consumption and investment in the country.

Lomé’s new strategy involves a battery of measures which should provide both local and foreign investors with a more attractive regulatory framework.

Amongst new incentives planned under the move, SMEs that are regularized will benefit exoneration of single business tax during their first year of operation. Togolese entrepreneurs will also no more pay stamp and registration fees imposed under the 2017 budget, when launching their businesses.

Moreover, the government decreased by 3% registration fees for land titles, from 5% to 2%. These various measures aim to provide SME and SMI with the needed safety net to easily secure loans from lenders.

Besides these, the 2018 finance bill restructured the General Tax Code to foster business creation in the country, which is WAEMU’s second most performing economy, in terms of growth, over the past 5 years.

Also, in 2018, import and sale of IT material and renewable energy production equipment will benefit from Value Added Tax exoneration. Another major incentive adopted is the cancellation of minimum capital requirement for LLC creation, this since January 1st.

All these measures should bear fruits by the end of the year. It is in sight of these that the World Bank said Togo’s GDP should grow by 5.3% in 2018.

Official data shows that in 2017, 10,000 new businesses were created in the country. The establishment of an attractive regulatory framework should help boost public earnings in years to come, thus significantly reducing budget deficit.

Fiacre E. Kakpo

In its New Year’s message, President Faure Gnassingbé has promised to award 20% of public procurements to young local entrepreneurs. “I plan to set aside up to 20% of public procurements to young entrepreneurs and women, who by the way will benefit from simplified procedures,” the president said.

This commitment aligns with the government’s will to boost socio-economic inclusion of youth in the country, as entrepreneurship is expanding.

“Togo’s youth, whose dynamism and involvement must be supported, will be at the center of the State’s actions. I am convinced that the answers to the issues of education, employment and youth insertion will be found by the youth themselves, through their contributions and thinking,” noted Faure Gnassingbé.

Expectations for the commitment are high, in Lomé especially. Ismaël Tanko, managing director Togo Timati, quoted by TogoTopInfos, said in this regard: “We are excited about this promise given that, if this measure, which is already in the SME/SMI charter, is concretized, it would be a true breath of air for young entrepreneurs and an additional mean to promote enterprises and local products. Moreover, the measure will push young entrepreneurs, desiring to benefit from it but who still operate in the informal sector, to regularize their business, subsequently generating tax income.

For some months now, Togolese government has implemented multiple measures to attract both local and foreign investors such as in the case of the card, the recent cancellation of minimum capital for LLC. Impacts of this decision are much anticipated during this quarter.

Fiacre E. Kakpo