Abstract
Côte d’Ivoire’s strong export performance was key the doubling of its income per capita over the past two decades. Sustaining income gains and increasing macroeconomic resilience going forward will require continued efforts to diversify its exports, which remain concentrated on a few products. The country has a natural comparative advantage and a dominant global position in some agricultural commodities, notably cocoa, cashew nuts, natural rubber, and cotton. While its commodity-processing industries have expanded significantly in the recent past, the country still has huge potential to add value to its primary exports. A policy environment that unlocks productivity and facilitates the development of agri-business would boost export diversification and pave the way for a deeper structural transformation of the Ivorian economy going forward. The reforms of the National Development Plan are steps in the right direction.
Assessing the Scope for Domestic Revenue Mobilization1
Côte d’Ivoire’s tax revenue has been increasing in recent years, supported by the authorities’ efforts, particularly on tax administration and digitalization. However, tax revenue remains low by international standards reflecting tax exemptions as well as low level of indirect taxation and non-compliance. While recent tax measures are encouraging, more policy changes are necessary, and should be anchored in comprehensive tax policy and administration reforms to boost revenue mobilization. Côte d’Ivoire’s tax policy reforms should focus on simplifying the personal income tax (PIT) regime and enhancing its progressivity; reducing or eliminating discretionary and statutory tax exemptions (particularly for value added tax and business profit tax); and harnessing unrealized revenue potential of property and excise taxes. Tax administration reforms should be sustained to further modernize tax and customs administration; deepen digitalization; and enhance management of human resources.
A. International Comparison of Côte d’Ivoire’s Tax Revenue Performance
1. Tax revenue performance in Côte d’Ivoire remains a major challenge. Despite the recent increase to 13 percent of GDP for 2021, Côte d’Ivoire’s tax revenue remains well below the West Africa Economic and Monetary Union (WAEMU) convergence target of 20 percent of GDP (IMF 2021) and low by international standards. Indeed, between 2008 and 2020, Côte d’Ivoire’s tax revenue performance has been below average levels in sub-Saharan Africa, low income developing countries, and emerging markets.
Côte d’Ivoire and Comparators: Tax-to-GDP Ratio, 2008–21
(Percent)
Citation: IMF Staff Country Reports 2022, 206; 10.5089/9798400214134.002.A001
Sources: WEO, IMF Internal World Revenue Longitudinal Database (WoRLD); and IMF staff calculations.2. Tax revenue underperformance is reflective of pervasive tax exemptions, particularly in sectors that are key drivers of economic growth (e.g., agribusiness, construction, transportation), as well as low level of indirect taxation and non-compliance.
3. Many countries succeeded in generating large revenue gains, pursuing both tax policy and revenue administration measures to broaden the tax base for both direct and indirect taxes (Akitoby et al 2020 & 2018). Such measures included improvements in tax compliance (particularly, risk-based audits, registration, filing, payment, and reporting, including via digitalization), as well as reduction of exemptions—most frequently related to value-added tax (VAT), corporate income taxes (CIT), and other goods and services taxes—and/or elimination of tax holidays or other tax incentives.
4. Many countries focused their revenue mobilization efforts on indirect taxation, in particular value-added tax (VAT) given that it has a broad consumption tax base and higher efficiency of collection (Akitoby et al 2020).2,3
5. Like most reforms, tax reform is an inherently political process potentially, often affected by resistance from vested interest groups (Abdel-Kader and de Mooij 2020; Akitoby et al 2020; IMF 2018). Gaining traction depends on inclusive consultation to include multiple stakeholders in society (i.e., business, tax professionals, civil society organizations, etc.)— coupled with an effective communication strategy emphasizing the benefits to society of reforms, such as those associated with the socially useful spending that can be financed by the increased revenues (Abdel-Kader and de Mooij 2020; Akitoby et al 2020 & 2018). Emphasizing the joint impact of tax reforms (especially if progressive) and the additional expenditures they help finance could further garner support, despite potential opposition from stakeholders that will be taxed more (Abdel-Kader and de Mooij 2020). At the same time, it is also important to strengthen institutional arrangements, particularly the capacity—within the tax policy unit—to undertake solid quantitative and qualitative analyses of possible reforms (see, for instance, How-To Note: Grote (2017), How to Establish Tax Policy Units.)4
B. General Diagnosis of the Tax System
Tax Policy
Direct Taxation
Personal Income Tax (PIT)
6. Personal income tax (PIT) is complex and opaque, juxtaposing a schedular system (fiscalité cédulaire) with taxation of total income (impôt global sur le revenu). Calculation of tax obligations is further subject to consideration of a family allowance (le quotient familial),5 as well as tax exemptions and abatements (abattement forfaitaire) of 20 percent and 15 percent. However, the design of tax abatements (abattement forfaitaire) is regressive, insofar as the overall reduction in taxable income generates sharper tax reductions for higher tax brackets (Leduc, S. et al 2020).
Additionally, Article 120 of General Tax Code levies a 1.5 percent proportional tax on labor income, which adds an additional layer of taxation.
Business Profit Tax (BPT)
7. The revenue performance and overall fairness of business profit tax (BPT)6 is weakened by numerous tax exemptions, a generous investment code, and informality (IMF 2021).
Côte d’Ivoire and Comparators: Corporate Income Tax (CIT) Revenue, 2008–2019
(In Percent of GDP)
Citation: IMF Staff Country Reports 2022, 206; 10.5089/9798400214134.002.A001
Source: IMF Internal World Revenue Longitudinal Database (WoRLD); and IMF staff calculations.Note: ‘Comparator Country Average’ in the above graph refers to WAEMU country averages excluding Côte d’Ivoire.Côte d’Ivoire and Comparators: CIT Revenue, Top Combined Rates and Productivity, 2019
(In Percent of GDP and Percent)
Citation: IMF Staff Country Reports 2022, 206; 10.5089/9798400214134.002.A001
Source: IMF Internal World Revenue Longitudinal Database (WoRLD); IMF Internal Tax Rates Database; IBFD; and IMF staff calculation.Note: CIT Productivity is calculated as (CIT Revenue) / [(CIT Rate) * (GDP)].Property Taxes
8. Revenue from property tax (0.54 percent of GDP in 2018) is comparable to other developing countries, which averages around 0.6 percent of GDP (IMF 2021). Property tax revenue target of one percent of GDP is generally considered a benchmark by experts.7
Indirect Taxation
Value Added Tax (VAT)
9. On tax policy, the largest gap vis-à-vis peer countries lies with low value added tax (VAT) revenues, which, at three percent of GDP, represents only half of what non-oil frontier markets collect, corresponding to a low C-efficiency ratio of 0.2 (2019). This could be attributed mainly to VAT exemptions (e.g., construction sector, grains, and oilseeds industries), reduced rates, as well as weak compliance.
Côte d’Ivoire and Comparators: VAT Revenue, Standard Rate and C-Efficiency, 2019
(In Percent of GDP and Percent)
Citation: IMF Staff Country Reports 2022, 206; 10.5089/9798400214134.002.A001
Sources: IMF Internal World Revenue Longitudinal Database (WoRLD); IMF Internal Tax Rates Database; and IMF staff calculations.Notes: C-Efficiency is calculated as (VAT Revenue) / [(VAT Rate) * (Total Consumption)]. VAT includes both VAT and Goods and Service Tax that effectively works like a VAT.Côte d’Ivoire and Comparators: Excise Tax Revenue, 2007–19
(Percent of GDP)
Citation: IMF Staff Country Reports 2022, 206; 10.5089/9798400214134.002.A001
Source: IMF Internal World Revenue Longitudinal Database (WoRLD); and IMF staff calculations.Note: ‘Comparator Country Average’ in the above graph refers to WAEMU country averages excluding Côte d’Ivoire.Excise Taxes
10. Côte d’Ivoire’s excise tax revenue has remained around or below one percent of GDP throughout the period 2007–2019—suggesting significant untapped revenue potential. In 2019, where a slight uptake in Côte d’Ivoire’s excise tax revenue is observed, its level remains well below the averages for sub-Saharan Africa and low-income developing countries (see figure above on the right). International review indicates that excise tax revenue potential ranges from one percent of GDP in low-income countries to 2.5 percent of GDP in advanced countries (Abdel-Kader and de Mooij 2020). Excise tax policy should in general focus on a few targeted goods, namely tobacco, alcohol, fuel, and possibly passenger vehicles. Article 359 of Côte d’Ivoire’s General Tax Code provides for a reduced VAT rate on petroleum products, which seems inconsistent with the economic rationale of levying targeted excise taxes on such products. Aligning excise tax rates to regional WAEMU directives would be particularly useful to ensure similar levels of taxation in neighboring countries, thereby minimizing the risks of illegal trafficking such as bootlegging and smuggling.
11. Generally, multiple excise tax regimes that are earmarked may prevent flexibility to allocate pooled resources depending on prevailing spending priorities. Côte d’Ivoire’s excise tax code includes additional earmarked tobacco excise taxes. Article 1085 of the tax code includes a special tax of five percent on tobacco for sports (taxe spéciale sur le tabac pour le développement du sport). Revenues from this tax are earmarked as follows: 50 percent to the Ivoirian Federation of football; 35 percent to other sports federations; and 15 percent to the socio-sports infrastructure project unit. Article 1133 of the tax code includes another special tax of two percent additional solidarity excise tax to fight against AIDS and smoking (taxe de solidarité et de lutte contre le SIDA et le tabagisme). Revenues from this tax are earmarked as follows: 70 percent for the National Foundation against AIDS (Fonds National de Lutte contre le SIDA) and 30 percent for the national program against alcoholism, tobacco, and other types of addiction (Programme National de Lutte contre le Tabagisme, l’Alcoolisme, la Toxicomanie et les autres addictions).
Tax Administration
12. Significant efforts have been devoted to strengthening tax administration in Côte d’Ivoire, including in the areas of comprehensive digitalization of tax and custom administration processes. Revenue administration reforms are deep reforms requiring organizational change and staff retraining to adapt to new tasks. Côte d’Ivoire needs to sustain the momentum of ongoing reforms, with a view to support tax mobilization capacity. It should be underscored, however, that improvement in tax administration alone is unlikely to yield revenue if the policy framework is fragmented and opportunities for tax avoidance and evasion are not adequately controlled.
C. Recent Tax Measures in Côte d’Ivoire
13. Côte d’Ivoire is implementing steps to enhance revenue mobilization both through tax policy and tax administration measures. The tax authority (Direction Générale des Impôts (DGI)) indicates a 20.8 percent increase in tax revenues from 2020 to 2021,8 which is attributed to tax policy efforts (FCFA 59.6 billion or about 5.2 percentage points of the increase); enhanced tax administration (FCFA 163.3 billion or about 14.6 percentage points of the increase); and tax arrears collection related to COVID-19 measures (FCFA 11.2 billion or about 0.2 percentage points of the increase).
14. Specific measures included rationalizing tax exemptions; cadaster registry of land to enhance property taxes; enhancing excise tax revenues; and modernization of tax administration through digitalization. These are discussed in further detail in the following paragraphs.
Enhancing Tax Policy
Rationalizing Tax Exemptions
15. Measures included in the government’s 2019 plan for rationalizing tax exemptions helped generate additional revenues in 2021 of around FCFA 18 billion (about $ 30 million). Additional revenues were generated from eliminating investment-related exemptions granted to the Loterie Nationale de Côte d’Ivoire (LONACI), as well as public subsidies allocated to l’Association pour la Promotion des Exportation (APEX-CI).
Property Taxes
16. A cadaster inventory of taxable land plots has been on-going between 2018–2021, which increased total taxable plots of land countrywide from 504,171 (30 percent) to 1,371,332 (69 percent). In the city of Abidjan, cadaster inventory increased from 240,141 (60 percent) to 360,183 (82 percent) – whereas for the interior of the country, the corresponding increase was from 264, 030 (21 percent) to 1,011,149 (65 percent).
17. In a similar effort, the Land Registry Department conducted land surveys (audits) in 2021 on buildings with more than two levels in Abidjan. In 2021, the assessed rights (droits constatés liquides) amounted to FCFA 1,256,558,696, of which FCFA 637,530,454 was recovered (50.7 percent). Similar exercise is expected to continue in 2022.
Excise Taxes
18. A modest effort was implemented with respect to excise taxes. Excise tax rate on tobacco has been increased from 39 percent (FCFA 8,346.80 million) to 40 percent (FCFA 8127.15 million) in 2022, with a potential estimated gain in tax revenues of FCFA 219.65 million (about $0.3 million.). In addition, to conform to the WAEMU directives, excise tax rates on cosmetic products have been reduced from 50 percent to 15 percent in the Annexe Fiscale of the 2022 finance law.
Modernizing Tax Administration
19. Digitalization has been an on-going measure under implementation to streamline/modernize tax administration. Arrêté No. 0054/MPMBPE (March 10, 2000) made electronic tax declaration (E-tax) and payment mandatory for all taxpayers of net business profits (under standard rules) beginning April 1, 2020. A single taxpayer identification number (STIN) is being issued to all new businesses while a majority of existing medium-size and large enterprises have been re-registered with a new STIN (IMF 2021). This is a critical step to enable information exchange on taxpayers between revenue collecting agencies of the government.
20. A new IT system (Le Système intégré de gestion d’impôts (SIGICI)) has also been deployed throughout the services of Côte d’Ivoire’s tax authority (Direction Générale des Impôts (DGI)) in the last quarter of 2020 to enable provision of reliable data for tax audits; track the status of tax obligations in real time; and provide decision makers with relevant information for effective management.
21. The digital cadaster inventory of parcels of land (E-Cadastre) has been instituted since 2019, which resulted in revaluation of the property tax base and integration of 78,000 new taxable parcels of land. Number of lots taxed increased by 14 percent from 556,130 parcels in 2020 to 634,148 parcels in 2021. Property taxes collected increased by 12 percent from FCFA164.5 billion (2020) to FCFA189.4 billion (2021). (An increase in 2020–21 of about FCFA 25 billion or about $40 million or about 0.06 percent GDP).9
22. Electronic Land Register (Livre Foncier Électronique–LIFE), which allows traceability of real estate transactions, was put into operation in 2017 and led to substantial increase in revenue from land conservation. Revenues increased from FCFA 58.2 billion (2018) to FCFA 81 billion (2020) and FCFA 106.1 billion (2021). (An increase in 2020–21 of about FCFA 25 billion or about $40 million or about 0.06 percent of GDP).
23. Additional tax administration measures envisaged for 2022 include: digitalized administration of value added tax (VAT); digitalized tax audits; and deployment of telecommunication information flow control device. The tax authorities indicate that additional revenues expected from implementation of these measures is evaluated at FCFA 75 billion (or about $120 million).
D. Suggested Domestic Revenue Mobilization Policy Recommendations
Tax Policy
Personal Income Tax (PIT)
24. Adopt a simplified dual income tax system and improve progressivity. This would involve abandoning the IGR (impôt global sur le revenu) and relying on redesigned PIT schedules applying to wages and salaries (at progressive rates) and profit income from mobile and immobile capital at flat rates. This would facilitate tax administration and render the system more transparent.
25. Eliminate the 20 percent and 15 percent tax reduction (abattement forfaitaire) for labor income. These reductions unnecessarily complicate the tax system and reduce its progressivity (as discussed above). They can be directly integrated within a revised progressive tax schedule (new tax backet and rates).
26. Repeal the family allowance (le quotient familial) and/or replace with a tax credit of—say—around FCFA 50,000 per child up to a maximum given number of children (amount can be anchored to inflation) (Leduc et al 2020).10 This would enhance the progressivity of the system. The family allowance (quotient familial) is a reduction in the taxable income, which is subject to different tax brackets, hence regressive. In other words, it subsidizes richer families more than poorer ones. A tax credit of a set amount per child would be neither regressive nor progressive – it offers identical tax subsidies independent of family income. Savings from repealing the family allowance (quotient familial) can help finance the child tax credit scheme or go into a general government fund to improve social spending to assist low-income families without tax liability or sufficient taxable income to qualify for the child tax credit.
27. Eliminate the 1.5 percent proportional tax on labor income (Article 120 of General Tax Code). This additional tax can be folded into a new tax schedule without any revenue loss.
28. Rationalize taxation of income from mobile and immobile capital through taxation at proportional and moderate rates (for instance, one for interest and one for dividends, capital gains, and rental income). This would facilitate scaling back tax exemptions.
Business Profit Tax (BPT)
29. Adopt a competitive BPT regime in the General Tax code and eliminate tax preferences from other instruments (e.g., investment code, discretionary tax exemption conventions, etc.). While removing some of the tax exemptions could yield about 0.3 percent of GDP in tax revenue (IMF 2021), removing the scope in the investment code to sign conventions with discretionary tax exemption would further enhance tax revenues (IMF 2021), transparency, and level the playing field. Moving away from a tax negotiation culture and rendering the system attractive, fair, and internationally competitive for all investments would seem desirable and aligned with international best practices. Where incentives are to be granted, these should be offered in the General Tax Code and consist of cost-based incentives (e.g., accelerated depreciation of capital assets, tax credits for targeted capital and labor costs) as opposed to profit-based incentives (tax holiday or reduced tax rate) (IMF 2015).11
30. It would also be important to reassess whether the taxation system for extractive industry is in line with prevailing international benchmarks.
Property Taxes
31. Establish fixed rights to registration of land transaction. Effective registration of property sales and the on-going introduction of an online cadaster should support property tax collection capacity in the medium term.
32. Segment the property tax base according to revenue potential. Given the heterogeneity of property tax base (particularly in urban settings), segmenting the tax base according to revenue size can ease tax administration by focusing on highest revenue potential segments (World Bank 2019).
Value Added Tax (VAT)
33. Enhancing the VAT design would be essential. In the international experience, it generally pertains to enhancing features related to a registration threshold; a broad base; and a single rate (Abdel-Kader and de Mooij 2020). While in the current environment of rising inflation it may not be socially desirable to increase consumption taxes, it remains important to continue assessing the appropriateness of such reforms as the situation improves.
34. Broaden the VAT tax base, by widening the scope of sectors in the tax net to agriculture, transportation, construction, real estate, foreign supplies of digital services, and telecommunications. (For example, VAT-exempt sectors such as grains and oilseeds industries represent about five percent of GDP (IMF 2019)). Progressively eliminate tax exemptions to converge with WAEMU directives, including drastically limiting the scope for discretionary exemptions in the investment code.
35. Streamline and rationalize the extent of reduced rates on multiple products and establish clear criteria for setting such reduced rates. Since 2009, a certain number of products (milk, production materials for solar energy, petroleum products, etc.) have been subject to a reduced VAT rate of nine percent Without a firm rule, there is a risk of revenue loss from expanding the number of products subject to the reduced rate. In addition, multiple rates make VAT administration complex (World Bank 2019). Côte d’Ivoire should also reconsider the merits of adopting a reduced VAT rate on petroleum products.
36. Remove legal restrictions on VAT refunds. Part of the demand for various exemptions stems from restriction on refund of VAT credits included in Article 382 of the General Tax Code. To promote the widest possible neutrality of VAT, such restrictions should be removed (World Bank 2019).
Excise Taxes
37. Align excise tax rates, including on alcohol and tobacco, to conform to the WAEMU regional standards to help boost tax revenues as well as ensure proper functioning of the regional markets.
38. Consolidate various excise taxes into a single levy and reduce earmarking of revenues. Multiple excise taxes may not be an ideal practice in fiscal governance of revenues; all revenues should be pooled to enable the government to decide how to allocate spending based on competing priorities. Earmarking revenues deprives the government of flexibility to reallocate funds to other initiatives which could be more important.
Tax Policy Reform Sequencing
39. Sensibly sequencing tax policy reforms would be essential, given that the needed reforms span a broad area, require several years to be implemented, and need sufficient groundwork to avoid abrupt adjustment. VAT and excise tax reforms could be implemented first since consumption-based taxes are relatively easier to administer. However, adequate consideration should be given to assessing the impact of reforms and ensuring that implementation delivers a gradual adjustment. Property tax reform should be on-going in tandem with progress on cadaster registry and valuation of property. Finally, personal income tax (PIT) reform will require significant ex-ante analysis on the potential revenue gains and the distributional impact, as well as the incentive implications for labor market and informality. Preparing such analysis over a few years will help with a gradual implementation over the medium term, including making significant changes to tax forms and withholding systems.
Tax Administration
40. Tax administration reform efforts, already being implemented, should be sustained over the medium term to realize the full benefits of the entire scope of the following reform areas.
Modernizing tax and customs administration by consolidating a binding VAT threshold (when multiple thresholds exist) to improve revenue administration performance over the medium term; dematerializing customs clearance procedures through digitalization; simplifying/strengthening the monitoring of transit and special procedures; and optimizing control of merchandise monetary values.1213
Digitalizing tax administration14 by continuing to ensure compliance with electronic tax payments; enhancing the capacity to collect and analyze tax data; fully implementing a single taxpayer identification number (STIN); and securing digital transaction and extracting performance indicators.
Modernizing the management of human resources15 by redesigning managerial procedures and staff evaluation guidance; enhancing skills and competencies of staff; and improving communication and relationships with taxpayers.
References
Abdel-Kader, K., and R., De Mooij. (2020). Tax Policy and Inclusive Growth. IMF Working Paper – WP/20/271. International Monetary Fund, Washington, D.C.
Akitoby, B., Baum, A., Hackney, C; Harrison, Olamide; Primus, K; and Salins, V. (2020). “Tax Revenue Mobilization Episodes in Developing Countries.” Policy Design and Practice. Vol. 3 (1):1–29.
Akitoby, B., Baum, A., Hackney, C; Harrison, Olamide; Primus, K; and Salins, V. (2018). Tax Revenue Mobilization Episodes in Emerging Markets and Low-Income Countries: Lessons from a New Dataset. IMF Working Paper, WP/18/234. Washington, D.C.
Akitoby, B.; Honda, J.; Miyamoto, H.; Primus, K; and Sy, M. (2018). Case Studies in Tax Revenue Mobilization in Low-Income Countries. IMF Working Paper, WP/19/104. Washington, D.C.
Grote, M. (2017). How to Establish a Tax Policy Unit. IMF – FAD How to Note No. 2017/002.
IMF. (2021). Côte d’Ivoire: Staff Report for the 2021 Article IV Consultation. July 6, 2021.
IMF. (2019). Côte d’Ivoire: Sixth Reviews under Arrangement Under ECF/EFF. IMF Country Report No. 19/366. November 19, 2019.
IMF. (2018). “Domestic Revenue Mobilization in Sub-Saharan Africa: What are the Possibilities?” Chapter 2, Regional Economic Outlook: Sub-Saharan Africa, Spring 2018.
IMF. (2015). Options for Low Income Countries’ Effective and Efficient Use of Tax Incentives for Investment. Report to the G-20 Development Working Group by IMF, OECD, UN and World Bank.
World Bank. (2019). Côte d’Ivoire – Relever le défi de la mobilisation fiscale. Banque mondiale, Washington, DC.
IMF Technical Assistance Reports:
Andre, N. (2019). Côte d’Ivoire. Poursuite de la modernisation de la gestion des ressources humaines à la Direction Générale des Impôts. IMF Technical Assistance Report, February-March.
Camaraire, H. and M. Hudon. (2021). Modernisation de l’administration douanière : amélioration de l’exploitation des données, de la conformité volontaire aux règles, et du contrôle et du suivi des exonérations. IMF Technical Assistance Report, May.
Jarry-Bouabid, A.-C. (2019). Côte d’Ivoire. Indicateurs de Performance de l’Administration Fiscale Ivoirienne. IMF Technical Assistance Report, August.
Leduc, S., J-F Brun, B. Laporte. (2020). République de Côte d’Ivoire: Fiscalité des entreprises et des personnes physiques. IMF Technical Assistance Report.
Montagnat-Rentier, G., J. Clark, M. Siqueira, and P.-A. Wandja. (2020). Côte d’Ivoire. Poursuite de la modernisation de l’administration douanière. IMF Technical Assistance Report, February.
Rota-Graziosi, G. G. Gilbert, and S. Leduc. (2018). Côte d’Ivoire. La Taxe sur la valeur ajoutée, la fiscalisation du secteur informel et l’impôt foncier. IMF Technical Assistance Report.
Prepared by Kaleb Tamiru Gulilat
Policy and administration efforts improve the C-efficiency ratio, defined as actual VAT receipts to notional receipts that would be collected if the tax was levied at a uniform rate on all final consumption and assuming full compliance.
In the study sample, average C-efficiency ratio increased from 0.25 and 0.47 in 2000 to 0.36 and 0.57 in 2015 respectively, for low-income countries (LICs) and emerging market countries (EMs) (Akitoby et al 2020 & 2018).
Effectively, the quotient familial is an income-splitting mechanism that spreads income over a calculated number of family members – and is highly regressive since it benefits most large families with high income.
Côte d’Ivoire’s General Tax Code does not have a corporate income tax (CIT) per se, but rather a business profit tax (BPT). For consistency of comparison with comparator countries, the term corporate income tax (CIT) is used interchangeably to denote business profit tax in the context of Côte d’Ivoire.
Ahmad et al (2017) as cited in Rota-Graziosi et al (2018).
This is significantly more than the increase in GDP. However, tax revenue levels were likely negatively affected in 2020 due to the COVID-19 pandemic; hence, the increase in revenue levels from 2020 to 2021 likely also reflects a rebound effect.
As indicated in footnote 8, this amount also likely reflects a rebound effect.
As part of its tax policy reform, Senegal repealed the quotient familial from its tax code in 2012, replacing it with a child tax credit (Akitoby, B.; Honda, J.; Miyamoto, H.; Primus, K; and Sy, M. 2018).
Cost-based tax incentives lower the cost of capital and may help generate investments that would otherwise have not been realized. Profit-based tax incentives generally reduce the tax rate applicable to taxable income, foregoing revenues and hence making projects that would otherwise have been made without the tax incentive even more profitable (IMF 2015).
