Viewpoint: Eric N’Guessan
Many Ivorian taxpayers believe that the progress made by their tax administration is noticeable. The situation has improved in recent years, in particular because the implementation of e-government practices has become a key area of interest for Ivorian authorities. The aim is to ensure that all administrative procedures are able to be conducted online by 2022.
Considering the financing requirements for the implementation of development programmes and the increase in external debt, tax collection is an urgent matter for African countries. It is even more pressing for the UEMOA countries, whose tax revenues represent barely 15% of their GDP – which is two times lower than that of OECD countries. The informal sector, and the evasion of tax and Customs are among the main causes of this shortfall. In fact, the informal sector represents 50% of the UEMOA zone’s GDP, with an estimated fiscal shortfall of more than 10% of GDP, while tax evasion accounts for about 5% of GDP.
If African countries have recognised the opportunity offered by digital technology to optimise the performance of tax administration, very few have initiated measures to take advantage of it. The digitalisation of the administration comprises areas such as civil registry, health, employment, social security and taxation. Moreover, it now covers all stages of the process.
Thanks to the development of e-government practices, it is possible to conveniently carry out civil and administrative procedures online. With the current global spread of the Covid-19 pandemic, this practice has been very useful. Indeed, in April 2017 the administration launched its digital platform with the aim to further secure the financial resources of the state by minimising human intervention. This has led to the reduction of corruption risks and the overall simplification of procedures, which saves time.
The digitalisation process started in 2012 with the digitisation of tax on motor vehicles, and in 2016 the electronic declaration of taxes and duties provided for in the General Tax Code was introduced. This obligation initially only concerned taxpayers belonging to the large companies directorate and the medium-sized companies directorate, as well as taxpayers subject to the normal real tax regime. However, in 2020 it was generalised, and now places all companies subject to a normal real tax regime and those associated with the regional tax division under the same obligation.
In addition, as of 2019 any professional who delivers goods or provides services by electronic means is obligated to issue standard electronic invoices; however, the implementation measures of the standard invoice have not yet been determined by the relevant ministerial decree. All of these reforms have enabled the country to make a notable improvement on the World Bank’s ease of doing business index, ranking 110th out of 190 countries surveyed. In 2012, when the digitalisation reforms started, Côte d’Ivoire was ranked 167th out of 183 countries surveyed.
However, more efforts are still needed to ensure that the ongoing digital revolution is successful. Full digitalisation of the tax administration can be achieved by completing the identification of telecommunication networks; encouraging and promoting the use of mobile money transactions; pre-filling paperless declarations; establishing incentive pricing for mobile payments in the informal sector; and implementing massive broadband coverage over the entire country.
For small and medium-sized enterprises (SMEs) it could prove beneficial to follow Estonia’s example – considered by the OECD as the model in this area – by developing an online public account directly linked to the business register, and creating an e-business register and an e-tax department. Implementing these recommendations would be in line with the SME Community Charter, adopted in 2015 by UEMOA countries, which provided the simplification of tax declarations for SMEs and allowed a broadening of the tax base, reducing the pressure on companies in the formal sector.
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