With 19% in 2023, Senegal appears to be the best student in the UEMOA zone, far ahead of the elephant Ivory Coast (14%), according to the 2023 UEMOA report. This is the share of national wealth taken up by taxation, in the form of compulsory levies.
The various tax policies and reforms implemented in recent years have contributed greatly to this improvement, supported by a wide range of tax levies imposed on businesses, in an environment where the weight of the informal sector is rather heavy.
This increased effort in mobilizing revenue in any case lifts the veil on a tax system considered complex and “ agressive », with companies that find themselves with no less than 53 taxes to manage between taxes on income, profits, social security contributions, taxes on goods and services, payroll deductions, taxes on assets and duties. transfer, as well as other taxes. The average is 36 taxes in sub-Saharan Africa; 25 in Ivory Coast; 6 in Morocco…
The necessary transition
It is true, the improvement in tax revenue is likely to contain the budgetary deficit and the debt, two (binding) criteria of first rank in the convergence pact. However, a decline in the size of the informal sector would play a role in revenue collection and financing the budget deficit. The transition from the informal economy to the formal economy should therefore be among the priorities.
Despite its significant weight in production and the creation of added value, the informal economy remains one of the major constraints for building a network of formal businesses and modernizing the economy.
With a tax potential estimated at more than 3000 billion CFA francs (DPEE) or around 20% of GDP, significant economic impacts can result from a possible recovery of these tax loopholes on the growth of activity, final consumption demand , private investment, among others.
The strategy could involve a reduction in the tax rate applied to corporate profits, with the advantage of eliminating the underground economy, subject to erasing the disadvantage of the significant budgetary and trade deficits that this would entail.
Recall that the adoption in 2015 of Additional Act No. 01/2015/CCEG/UEMOA establishing new convergence criteria reducing the number from eight (8) to five (5) criteria: three so-called first-rank criteria and two of second rank including the rate of tax pressure.
Malick NDAW
