- Togo is considering the IMF’s suggestion to reduce VAT exemptions.
- The IMF wants Togo to reform its tax framework to increase public revenue.
- The IMF suggests reducing VAT exemptions, extending personal income tax, and aligning with the global minimum tax for certain companies.
- VAT exemptions cost the Togolese government CFA60.8 billion in 2023.
- Togo is taking a cautious approach to reducing VAT exemptions, fearing it could harm certain sectors and raise living costs.
- The government plans to assess VAT exemptions by June 2025 to identify which ones benefit low-income households and which primarily help businesses or wealthier groups.
- The IMF has proposed targeted cash transfers for vulnerable populations to offset the potential negative effects of reducing VAT exemptions.
- The government is working on a comprehensive medium-term revenue mobilization strategy (SMRMT), expected by June 2026, which could include such measures.
- The debate over VAT reform remains contentious, with some economists arguing that VAT exemptions protect low-income households’ purchasing power, while others highlight the revenue loss for the state.
- The IMF suggests gradually requiring companies benefiting from special tax regimes to relocate into special economic zones.
Source: togofirst.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
