Submitted to the National Assembly on November 13, 2024, the bill on local taxation proposes to eliminate certain municipal taxes and introduce major reforms to optimize the resources of decentralized local authorities (CTD). These measures aim to simplify the legal framework, strengthen the financial autonomy of CTDs and improve financing mechanisms.
With only three local taxes providing more than 90% of the tax revenues of the CTD, the government considers the current architecture of local taxation to be obsolete. In response, the bill introduces far-reaching reforms. Among the main innovations, the increase to 1% of the special excise duty rate will make it possible to finance the collection and treatment of waste. The withholding tax and seven other municipal taxes will disappear in favor of a new Synthetic General Tax (IGS) intended for micro and small businesses with a turnover of less than 50 million FCFA.
In addition, the full proceeds of the stamp duty on vehicle registration documents and a portion of the taxes on petroleum products (TSPP) will be reallocated to the regions. As for the Special Fund for Equipment and Intercommunal Interventions (Feicom), it will centralize 70% of regional taxes and duties, with the exception of stamp duty, as well as 50% of oil, gas and mining royalties, to ensure a better distribution of resources.
Administrative reorganization and tax dematerialization
The bill also provides for structural reforms at the administrative level. The Divisional Tax Centers (CDI) will be transformed into Local and Individual Tax Centers (CFLP) to better meet the specificities of the CTD. Modernization also involves aligning tax procedures with dematerialization, affecting the registration, declaration, and collection of local taxes. Cash payments will be gradually replaced by more secure electronic payment methods. Control and litigation procedures will be adapted to ensure efficient collection and better meet local needs.
Towards greater autonomy of CTDs
The overall objective of this reform is to broaden the tax base and diversify the sources of financing of the CTDs. According to the government, this modernization will ensure better pooling of actions between the tax administration and the CTDs, thus strengthening their autonomy and their capacity for intervention. Examined by the deputies, this text marks a crucial step in building a fair and sustainable local taxation system, serving the development of local authorities.
