Last Wednesday, while meeting with the press, the Togolese Revenue Authority (OTR) disclosed the major tax innovations of the new finance act. 

On the occasion, officials from the authority revealed that many changes have been made to the original draft bill. These include broadening the tax base and strengthening measures to control and tackle tax fraud and evasion, reducing the tax burden, making technical adjustments, and taking into account sub-regional tax regulations.

In detail, this year, value-added tax (VAT) will be imposed on electronic or digital transactions, i.e. services, operations, advertising, and others, offered by Togolese residents or businesses subjected to the Togolese law. 

Also, it is now compulsory for bailiffs, authorized customs agents, and other administrative authorities like notaries to request, hold and declare any information regarding beneficial owners of businesses and other entities to which they provide their services. 

Besides broadening the tax base to boost tax and customs revenues, the OTR reduced tax pressure on young entrepreneurs who pay the unique professional tax (TPU). From CFA300,000, the TPU was reduced to 20,000 CFA for the year 2021. Moreover, to encourage the population to adopt the motor vehicle tax, the Togolese government has significantly reduced the tax burden, which is considered too high for taxpayers. 

The tax revenue authority also observed that, in line with efforts to improve the business climate in Togo, it will no more collect any fee when a guarantee on immovable property (a mortgage registration) is released and canceled. 

In the same vein, the registration fee for transferring a property (resale) fell to 0.6% against 6% in 2020, while the fee for parceling was cut from 1% to 0.3%. 

In addition to these, some technical changes were also introduced. For example, the new tax law allows businesses to issue a provisional declaration of their annual performances and regularize it within the following three months. 

Séna Akoda

In Togo, the extension of credit granted to companies and individuals since April 1, 2020, due to the health crisis induced by the Covid-19, amounts to more than 18 billion FCFA.

Let’s recall that, as of September 30th, the Central Bank of West African States (Bceao) instructed credit institutions to grant, without any interest charge or late penalty, three months extension of maturities to companies that request the delay due to struggles caused by the pandemic.

In detail, as at the end of September 2020, maturity extensions had been granted to 212 companies for a total of 15 billion FCFA. On the other hand, 1361 individuals have requested and benefited from the incentive for 3 billion FCFA.

This was disclosed by the minister of finance, Sani Yaya, during the last session of the National Credit Council (CNC) in 2020. According to him, the measure has not only allowed banks to control credit risk, but also businesses and individuals to preserve the quality of their signature and, therefore, maintain their access to financing.

Séna Akoda

Togo recently adopted a national strategy for research and innovation covering the 2020-2030 decade. 

The document was validated by the ministry of higher education and scientific research on December 22, during a two-day meeting which gathered researchers, central directors, as well as the country’s technical and financial partners.

Among others, the new strategy is aimed at tackling Togo’s shortcomings in terms of research, and defining its main directions, taking into account economic and development ambitions falling under the national development plan (PND). 

Most importantly, the objective is to solve financing issues, by raising national GDP’s quota dedicated to research. “While African Union states have agreed to invest 1% of GDP in research, here we dedicate between 0.15 and 0.22% of the GDP,” said Prof. Kouami Kokou, national director of research at the ministry of higher education.

The two other main axes covered by the new strategy are “how to provide the country with research structures” and “the transfer of research; how to make research benefit the communities.”

Ayi Renaud Dossavi

In Togo, a new labor code was unanimously adopted by the parliament on December 29, 2020. 

The document, which contains 378 articles, replaces a text in use since 2006. Among others, it aims to “make clearer major regulations in this area (labor), while fostering more investments.”

The adoption of the new regulation embodies a need to achieve balance between the protection of workers’ interests across existing socio-professional categories, and the interests of employers and investors. 

The new text, said Togo’s Minister of Civil Service, Gilbert Bawara, is aimed at ensuring a “judicious balance between the aspirations and expectations of workers and also the needs of companies and employers.”

In effect, the labor code will help establish better working conditions, improve social and environmental standards, better handle overtime, and boost mechanisms aimed at preventing and solving work-related conflicts. It is also expected that regulation related to temporary unemployment and layoffs (for economic reasons) will be improved. 

The adoption, it should be emphasized, concretizes the government’s ambition to have more business-friendly labor rights, as it told Togo First a few months ago, in line with reforms introduced to improve business climate. 

Ayi Renaud Dossavi

Transport startup Gozem  recently launched a package delivery and order management service called Gozem Shopping. 

In a recent statement, the firm said the new service allows its customers to order goods, from an online catalogue, and be delivered with taxis. 

The new service was launched a little after the Uber-like firm acquired in Delivroum, a meal delivery app operational in Togo. As a result, Gozem now delivers meals, in addition to groceries, gas bottles, and various electronic goods. 

Ayi Renaud Dossavi

Interest rates of banks operating in Togo are extremely high, in contrast with easing measures introduced this year to support consumers amid the pandemic.

This was revealed by the Minister of Economy and Finance, Sani Yaya, during the last session of the National Credit Council (CNC), which was held on December 24, 2020.

Yaya observed that “interest rates on loans are still at relatively high levels, despite the relaxations observed in 2020 compared to 2019,” and also because “the Central Bank (BCEAO) has lowered its key rate to 2%, effective since June 24, 2020.”

It should also be noted that, in order to reduce the pressure on financial institutions and mitigate the economic impact of Covid-19, the BCEAO proceeds to liquidity injections at a fixed rate of 2%. 

For all these reasons, said the minister of finance, “it is difficult to understand why the cost of credit is high.” He then instructed the association of banking actors to conduct a study probing into the matter, asking them to find out the reasons for using such rates.

The CNC, let’s recall, is in charge of assessing the operating conditions of Togo’s banking and financial system, in concert with the BCEAO.

Ayi Renaud Dossavi

The European Union (EU) will spend CFA2.2 billion to improve urban governance and social openness in the Haho prefecture in Togo. In detail, the related project covers the municipalities of Haho 1, Haho 2, Haho 3, and Haho 4. 

The EU’s financing represents 85% of the total amount required for the project (CFA2.6 billion). Through the move, the Union reinforces its actions in favor of local governance in Togo. 

In effect, the project, which should extend over four years and benefit 311,000 people, involves strengthening the foundations of an inclusive, participative, and urban governance based on gender equality and human rights. 

In the areas, it covers, the project will ease access to water, sanitation, and participative legal services. It will also foster the empowerment and employment of women, youths, and the poorest. Culture will, in this framework, be a major vector for social cohesion. 

The municipalities will benefit from a sharing of experiences in urban governance and the development of services leveraging international partnerships (notably with municipalities of Bapaume in France and Porto-Novo in Benin).

The initiative will promote exchanges of best practices with NGOs (CDD, Self Help Africa) and municipalities in Togo that have implemented projects for access to essential services financed by the EU. Thanks to the project, 10,000 women, young people, and poor people, will get birth certificates and another 2000 people will have access to literacy, among others.

Séna Akoda

To advance its decentralization process, Togo intends to build 40 new town halls. This was decided at the latest council of ministers. 

Besides building the new facilities, Lomé wants to train 1500 municipal counselors across the country, in addition to drawing a development plan for 10 municipalities. 

Togo will, in this framework, benefit from the support of Europe (Germany’s especially, through GiZ’s ProDeGol initiative). 

It should be noted that the following municipalities are already working on their development plan: Golfe 1, Haho 3, Kozah 2, and Dapaong

Next year, the European Union could provide Togo €48 million to fight Covid-19. 

The funding announced during the 21st session of the Togo-EU political dialogue should come as budgetary support. During the meeting, the two partners committed to improving their cooperation, especially concerning the pandemic. 

It must be noted that in 2020, the EU has been one of the West African nation’s major technical and financial partners, notably in tackling the pandemic.  

The sum announced is twice what the Union promised to disburse for Togo this year, to help it fight the virus. 

Talks at the recent meeting with the European delegation also focused on challenges related to vaccination against the virus. 

Ayi Renaud Dossavi